The Auditor General of Pakistan (AGP) has highlighted a significant lapse by the Oil and Gas Regulatory Authority (OGRA) in fulfilling its regulatory duties, particularly regarding the notification of the final Re-gasified Liquefied Natural Gas (RLNG) price. This failure, which dates back to the start of RLNG imports in 2015, has led to the accumulation of a massive amount of Rs. 103 billion.
In its audit report for 2023-24, the AGP observed that OGRA’s inability to finalize and notify RLNG prices has caused numerous financial and legal complications. Among these, a differential amount of Rs. 103 billion has accrued on Sui Northern Gas Pipelines Limited (SNGPL) as payable to Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). Additionally, SNGPL is facing legal disputes with RLNG consumers due to the absence of finalized pricing.
Under Section 6(2)(r) of the OGRA Ordinance 2002, the authority is responsible for administering or establishing prices for petroleum categories as delegated by the federal government. In 2016, the Directorate General (Gas) issued guidelines for determining RLNG sales prices after approval from the Economic Coordination Committee (ECC) of the Cabinet, directing OGRA to implement the ECC’s decision. However, OGRA has yet to fulfill this mandate.
The AGP’s audit report criticized OGRA for failing to discharge its regulatory responsibilities, which has resulted in financial disputes between RLNG buyers and sellers and delayed payments.
The issue was formally reported to OGRA in August 2023. During a Departmental Accounts Committee (DAC) meeting on January 3, 2024, OGRA stated that the scrutiny of data for RLNG price determination was in its final stages and assured that the final prices would be notified by March 2024. However, no progress had been reported by the time the audit report was finalized.
The DAC directed OGRA to expedite the notification of RLNG prices, but the delay remains unresolved.
The AGP has recommended that OGRA finalize RLNG prices without further delay and hold those responsible for the prolonged inaction accountable. The report emphasized the need for immediate action to prevent further financial and legal complications.
