The auditor general of Pakistan has revealed irregularities of more than Rs 962 million on account of non-realization of petroleum levy on sale of petroleum products in the Ministry of Petroleum and Natural Resources.
According to the Audit Report for 2012, it has been exposed that the director general neither monitored the assessment nor collected full amount of petroleum levy from Byco Pakistan Ltd Karachi on the quantity sold to them during different period, which resulted into non realization of petroleum levy of Rs 962.885 million.
The report said according to Section 3 of the petroleum products ordinance, every licensee shall pay a development levy at such rates and in such manner as the federal government.
According to section 3-A of the petroleum products ordinance 1961 and notification issued by the DG /OGRA petroleum levy is to be collected at the rates notified therein, while contrary to it, the DG oil did not fully monitored the collection process that resulted into loss of millions of rupees to the national exchequer.
The audit report further disclosed that the director general petroleum concessions did not recover royalty of Rs 200.093 million from exploration and production companies.
According to the regulation of the mines, oilfields and mineral development (Government control) Act 1948 read with rule 36 of the Pakistan Petroleum rules 1986, holder of a lease shall pay royalty @ 12.5 percent of the wellhead value of the petroleum produced and saved.
A departmental committee was also constituted to see the issue and committee also unanimously agreed that royalty on LPG was payable on sale value, however, violating all rules, an amount of Rs 200 million was not recovered, resulting in loss to the national exchequer.
Besides, the director general petroleum concessions had not recovered license rent of Rs 115.591 million from certain exploration and production companies in respect of license held by them for their fields. It is mandatory for any license holder to pay the government annually in advance rents, as prescribed in the Pakistan petroleum rules.