AGP Criticizes OGRA for Failure to Notify RLNG Prices, Leading to Rs. 103 Billion Accumulation
The Auditor General of Pakistan (AGP) has criticized the Oil and Gas Regulatory Authority (OGRA) for failing to fulfill its regulatory duty in notifying the final Re-gasified Liquefied Natural Gas (RLNG) price, which has led to an accumulated financial burden of Rs. 103 billion.
According to the AGP’s 2023-24 audit report, OGRA has not officially notified the final RLNG price since the beginning of RLNG imports in 2015.
This lack of price finalization has resulted in several financial disputes between RLNG buyers and sellers. Notably, Sui Northern Gas Pipelines Limited (SNGPL) has accrued an estimated Rs. 103 billion in payables to Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). Additionally, SNGPL is facing legal challenges from RLNG consumers due to the unresolved pricing issue.
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As per Section 6(2)(r) of the OGRA Ordinance 2002, the authority is responsible for administering and setting prices for petroleum products regulated by the Federal Government. In 2016, the Director General (Gas) issued pricing guidelines for RLNG after approval from the Economic Coordination Committee (ECC), instructing OGRA to implement the decision.
The audit report concluded that OGRA’s failure to notify RLNG prices has led to significant financial mismanagement. The matter was formally reported to OGRA in August 2023, and during a Departmental Accounts Committee (DAC) meeting on January 3, 2024, OGRA stated that price determination was in its final stages and that the final RLNG price would be announced by March 2024. However, no further progress had been reported by the time of the audit’s finalization.
The audit report recommends that OGRA immediately finalize RLNG prices and hold accountable those responsible for the prolonged delay in price determination.
