Pakistan’s gas sector is under scrutiny as the Auditor General of Pakistan (AGP) revealed financial irregularities worth billions of rupees in the 2024-25 audit report.
The report highlighted issues including non-recovery of gas royalties and misuse of subsidies.
Key financial irregularities in gas sector
The AGP report for FY 2024-25 raises serious concerns over the transparency and financial management of Pakistan’s gas sector.
The report revealed that the Oil & Gas Development Company Limited (OGDCL) failed to recover Rs 635 billion from refineries and other gas companies. Additionally, an extra subsidy of Rs 11.65 billion was allocated to RLNG-based industrial units, pointing to potential misuse of government funds.
Due to non-payment by refineries and gas companies, Pakistan’s circular debt has increased, straining the financial health of the energy sector. Commercial revolving debt across refiners, gas, and power companies also surged by Rs 69 billion, reflecting ongoing liquidity challenges.
The AGP report flagged major documentation gaps. Records for the payment of oil and gas royalties worth Rs 15.96 billion do not exist, and 34 royalty challans covering 131 crude oil and 199 natural gas lines were not provided during the audit.
Experts warn that continued non-recovery of royalties and subsidies could worsen Pakistan’s energy circular debt, potentially affecting gas supply and industrial operations. The audit findings call for immediate corrective measures and stricter oversight of gas sector finances.
