ISLAMABAD – An audit laid bare billions of rupees in financial irregularities across Pakistan’s petroleum sector, raising fresh questions over governance, accountability, and the cost of regulatory failures.
From excessive gas losses and unrecovered government dues to shady procurement practices, Auditor General of Pakistan’s latest report raised questions on how more than Rs. 82.46 billion slipped through the cracks in a single fiscal year.
AGP Audit Report 2025-26 points out losses from excessive gas losses, delayed recoveries, questionable payments, and procurement irregularities across several state-owned energy companies. The audit identified Unaccounted-for Gas (UFG) losses at Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) as the single largest contributor to the financial impact.
Gas losses exceeding the limits permitted by the Oil and Gas Regulatory Authority (OGRA) resulted in a loss of Rs. 39.43 billion, making it the most significant irregularity highlighted in the report. The report pointed to Rs14.06 billion in unrealised wellhead value, royalties, and late payment surcharges that remain outstanding from exploration and production companies. In addition, the audit found Rs. 5.04 billion in unrecovered non-tax government receipts.
Pakistan Mineral Development Corporation (PMDC) was reported to have suffered Rs. 4.66 billion in revenue losses after coal mining contracts continued under expired and non-competitive agreements instead of being awarded through fresh bidding.
AGP further noted that Rs3.23 billion in funds withheld under the Benazir Employees’ Stock Option Scheme (BESOS), along with unclaimed dividends, had not been deposited into the Federal Consolidated Fund as required. Another finding involved Pakistan Petroleum Limited (PPL), where the audit identified Rs. 3 billion in unrecovered take-or-pay revenue.
The report highlighted multiple irregularities involving Oil and Gas Development Company Limited (OGDCL). These included an unauthorized Rs. 5.19 billion signature bonus, a Rs. 3.81 billion refund of liquidated damages to a contractor, and procurements worth Rs. 347.9 million that were processed against fake bank guarantees.
Beyond financial irregularities, AGP questioned the diversion of Regasified Liquefied Natural Gas (RLNG) to domestic and commercial consumers during the summer despite the availability of sufficient indigenous gas. According to the audit, the subsidy cost created by this decision was incorporated into public gas tariffs, ultimately increasing fixed charges for consumers.
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