The audit report on the accounts of receipts of the Petroleum Ministry states that because of systemic deficiencies and a lack of internal controls, the ministry had caused losses of Rs 59.72 billion to the national exchequer during the fiscal year 2009-10.
The report says the Petroleum Ministry collected revenues of Rs 160.1 billion on account of royalty on oil and gas, gas development surcharge (GDS), petroleum levy (PL), discount retained on local crude oil prices and miscellaneous receipts against revised estimates of Rs 179.7 billion for the financial year 2009-10. It says the accounts were still short of Rs 19.6 billion (11 percent) in comparison with the revised estimates of receipts, despite a downward revision of estimates from Rs 192.01 billion.
Audit pointed out losses of Rs 59.72 billion, out of which a recovery of Rs 4.46 billion was made. The report says that audit made efforts to obtain auditable data for the desk audit but adequate data was not provided to exercise effective monitoring and assessment of collection of various receipts. The report says absence of field-wise data of receipts and lack of internal controls in the Petroleum Ministry points to systemic deficiencies in preventing irregularities on non- or short recovery of receipts occurring year after year.
Key findings of the report say that the failure to recover government dues of Rs 49.614 billion, short recovery of Rs 2.377 billion and failure to realise interests on late payment of the GDS in just one case amounted to Rs 401.8 million, and loss of GDS amounting to Rs 2.8 billion because of higher unaccounted for gas (UFG) allowance and misclassification of petroleum levy of Rs 1.9 billion.
The report says the Petroleum Concessions director general did not recover the royalty of Rs 5.63 billion on crude oil and natural gas from Oil and Gas Development Company Limited (OGDCL) and Rs 260.9 million from BP. The irregularity was pointed out during the August-November 2010 period. Rs 3.3 billion on account of petroleum levy were also not recovered from the Pak Arab Refinery, which was payable during May-June 2010.
The director general did not recover a discount retained on local crude oil price of Rs 2.9 billion from the Attock Refinery Limited, which had been withheld by the refinery. The gas director general did not recover GDS of Rs 6.2 billion from Pakistan Petroleum Limited, Mari Gas and Tullow Pakistan from November 2009 to June 2010. The default further attracted levy of interest at 15 percent per year.
The gas director general could not present the true position before the Oil and Gas Regulatory Authority (OGRA) in respect of 7 percent UFG allowed by the regulator to Sui Northern Gas Pipelines Limited (SNGPL) for fiscal year 2009-10. The allowance was not in line with the benchmark prescribed in the UFG manual published by SNGPL itself.
The accepted international benchmark of UFG ranges between 3 to 6 percent and was higher than 5 percent allowed for the previous year to SNGPL, the report says.
The excess allowance to SNGPL resulted in a loss of GDS amounting to Rs 2.8 billion in 2009-10, it adds. Audit recommended in the report that the Petroleum Ministry should immediately establish an internal audit wing to address systemic deficiencies to prevent recurring violations and irregularities repeatedly pointed out by the auditors.
