Prime Minister Shehbaz Sharif has recently directed the Ministry of Energy to initiate a comprehensive financial audit of Sui Northern Gas Company Limited (SNGPL) and Sui Southern Gas Company (SSGC).
Reportedly, these gas companies have been receiving gas from public sector exploration and production (E&P) firms without adequately reimbursing them. Additionally, both entities have been utilising expensive Regasified Liquefied Natural Gas (RLNG) from Pakistan State Oil (PSO) without proper compensation.
To address these concerns, a national daily has highlighted the Prime Minister’s directive for a swift financial audit, to be conducted within a month. The audit will be facilitated by KPMG, a renowned global auditing firm, tasked with investigating the reasons behind the gas utilities’ failure to reimburse E&P companies and PSO.
Furthermore, the audit will delve into various aspects, including examining the revenue of gas companies, assessing government subsidies, and analysing gas prices regulated by the Oil and Gas Regulatory Authority (OGRA).
Of significant interest is the audit’s aim to ascertain the impact of recent gas price hikes and determine if Sui companies have fulfilled their financial obligations to E&P firms such as OGDCL, GHPL, and PPL. It has been highlighted that the outstanding payments to these E&P companies have soared to a staggering Rs. 1.732 trillion.
Moreover, the financial audit is expected to shed light on the concerning issue of circular debt within the gas sector, which has ballooned to Rs. 2.9 trillion. A substantial portion of this debt, amounting to Rs. 1 trillion, has accumulated due to stagnant gas prices prevailing over the past decade.
The initiation of this audit underscores the government’s commitment to ensuring transparency, accountability, and financial discipline within the gas sector, addressing longstanding concerns and paving the way for sustainable reforms.
