KARACHI: The Auditor General of Pakistan (AGP) has criticized the Oil and Gas Regulatory Authority (OGRA) for its failure to fulfill its regulatory responsibilities concerning the notification of the final Re-Gasified Liquefied Natural Gas (RLNG) price. This lapse has led to a massive financial accumulation of Rs. 103 billion, creating disputes between key stakeholders in the energy sector.
According to the AGP’s audit report for 2023-24, OGRA has not issued a final RLNG price since the introduction of RLNG imports in 2015. This prolonged inaction has caused serious payment conflicts between buyers and sellers.
Specifically, Sui Northern Gas Pipelines Limited (SNGPL) has accumulated an estimated Rs. 103 billion in payable dues to Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). Additionally, SNGPL faces legal complications with RLNG consumers due to the uncertainty surrounding the finalized price.
Under Section 6(2)(r) of the OGRA Ordinance 2002, the regulatory body is responsible for setting and managing petroleum prices as directed by the federal government.
In 2016, the Director General (DG) Gas issued pricing guidelines following approval from the Economic Coordination Committee (ECC) of the Cabinet. However, despite these directives, OGRA failed to establish and notify a final RLNG price, exacerbating financial and legal issues within the industry.
The audit findings were formally reported to OGRA in August 2023. During a Departmental Accounts Committee (DAC) meeting on January 3, 2024, OGRA officials claimed that the pricing data review was nearing completion and that the final RLNG price would be announced by March 2024. However, no progress was reported by the time the audit was finalized.
The DAC has urged OGRA to expedite the notification of RLNG prices without further delay. Additionally, the audit report recommends holding accountable those responsible for the prolonged inaction, ensuring regulatory efficiency in the future.
OGRA’s failure to resolve this issue has not only created financial burdens but has also led to uncertainty in the energy sector. Immediate action is necessary to prevent further financial losses and ensure transparent pricing mechanisms in Pakistan’s oil and gas industry.
