A parliamentary audit has questioned more than Rs1.7 billion in spending by Pakistan’s two state-owned gas utilities, including Rs1.604 billion in employee bonuses paid by Sui Southern Gas Company (SSGC) and Rs115.6 million spent by Sui Northern Gas Pipelines Limited (SNGPL) on tea, coffee, club memberships and subscriptions.
The findings were presented on Wednesday before the Public Accounts Committee (PAC) Sub-Committee-II, chaired by Syed Naveed Qamar, during its review of audit observations relating to the Petroleum Division for the period from 2011-12 to 2022-23.
According to audit officials, SNGPL booked Rs115.6 million spent on refreshments, club memberships and subscriptions in 2018 under human resource expenses and recovered the amount through gas tariffs charged to consumers.
Auditors argued that these were non-operational expenses and should have been paid from the company’s profits rather than included in costs passed on to consumers. They particularly objected to executive club memberships being treated as recoverable expenses.
SNGPL management defended the payments, saying club memberships and other employee benefits were provided under board-approved service rules and the company’s HR policy. Officials also informed the committee that employees now pay nearly half of the cost of tea and coffee.
Questioning the unusually high expenditure, PAC Convener Syed Naveed Qamar remarked, “What kind of tea and coffee costs so much?” He also said executive club memberships should not be financed through public tariffs, noting that consumers deserve greater accountability whenever gas prices increase.
The committee was informed that the Oil and Gas Regulatory Authority (OGRA) has excluded club memberships, subscriptions and several other non-operational expenses from gas tariff determinations since 2021. The audit objection was subsequently settled.
In a separate observation, auditors questioned SSGC’s payment of Rs1.604 billion in bonuses to executives and employees despite the company not posting a profit. The audit maintained that the payments were inconsistent with Finance Division guidelines and included bonuses paid to the company’s managing director.
SSGC officials defended the payouts, stating that the bonuses were performance-based, approved by the board and linked to individual performance rather than the company’s profitability.
