ISLAMABAD: The Auditor General of Pakistan (AGP) has uncovered massive irregularities in the diversion of expensive Re-gasified Liquefied Natural Gas (RLNG) to domestic and commercial consumers, exposing significant financial mismanagement in the country’s gas sector.
According to the 2025-26 Audit Report tabled in the National Assembly, unjustified costs amounting to hundreds of billions of rupees were transferred to gas consumers through tariffs and fixed charges, raising serious concerns about governance and regulatory oversight.
RLNG Diversion Created Massive Subsidy Gap
The audit report states that Sui Northern Gas Pipelines Limited (SNGPL) diverted more than 188 million MMBTUs of RLNG between November 2018 and October 2023.
To compensate for supplying the higher-cost imported gas at subsidized indigenous gas prices, the company claimed Rs370.36 billion in government subsidies.
However, only Rs116.06 billion was released, leaving Rs254.3 billion in outstanding subsidy claims.
Summer RLNG Diversion Raised Audit Concerns
Auditors found that substantial volumes of RLNG were diverted during the summer months when sufficient indigenous gas was available at a much lower cost.
According to the report, this practice alone resulted in an irregular subsidy claim of Rs73.03 billion.
The AGP estimated that the total financial impact of these unjustified practices exceeded Rs100.9 billion.
Audit Highlights Governance Failures
The report notes that RLNG diversion was introduced in 2018 as an emergency measure to address declining indigenous gas production.
However, auditors concluded that the system lacked proper planning, transparent costing mechanisms, and effective oversight from the outset.
The audit further revealed that RLNG diversion extended beyond the categories approved for domestic and commercial consumers.
In addition, Rs30.8 billion in unbudgeted subsidies was released without following the required approval process.
Weak Oversight Increased Financial Risks
The AGP found that no pre-audit or independent verification of subsidy claims had been conducted after the 2019-20 fiscal year.
The report also pointed to weak financial controls, inadequate monitoring, and non-compliance with decisions of the Economic Coordination Committee (ECC).
By March 2025, SNGPL’s revenue shortfall had reached Rs529.34 billion, highlighting the growing financial pressure on Pakistan’s gas sector.
Although the Oil and Gas Regulatory Authority (OGRA) had issued various directives, auditors observed that no comprehensive policy framework was developed to recover the accumulated losses.
AGP Calls for Immediate Reforms
The Auditor General has recommended strict verification of all future subsidy claims to improve transparency and accountability.
The report also calls for subsidies to be limited strictly to approved consumer categories and urges the government to introduce transparent adjustment mechanisms to prevent similar financial irregularities in the future.
The findings underscore the need for stronger governance, improved regulatory oversight, and better financial management to protect both public finances and gas consumers from unnecessary costs.