ISLAMABAD: The Auditor General of Pakistan (AGP) has called on the Petroleum Division to accelerate the progress of gas infrastructure projects to address the ongoing energy crisis in the country. The slow pace of these projects is cited as the primary reason for the non-utilization of the Gas Infrastructure Development Cess (GIDC), which amounts to Rs 351 billion.
In its report for FY 2023-24, the AGP noted that according to Section 4(1) of the Gas Infrastructure Development Cess Act, 2015, “the Cess shall be utilized by the Federal Government for or in connection with infrastructure development of the Iran-Pakistan Pipeline Project (IP), the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project, LNG, or other ancillary projects.” During the audit of DG (Gas) for FY 2022-23, it was revealed that DG (Gas) had collected GIDC totaling Rs 354,046.784 million up to June 30, 2023.
However, the Federal Government utilized only Rs 3,343.727 million for the operational costs of ISGSL and repayment of its loan to GHPL. These funds were intended for use on the TAPI, IP, and Pakistan Stream Gas Pipeline Project (PSGP). The slow progress of these major gas infrastructure projects has led to the non-utilization of GIDC funds amounting to Rs 350,703.057 million. The audit concluded that the Petroleum Division failed to use GIDC funds for their intended purposes, leading to a halt in further GIDC collection. This issue was reported to management in September 2023.
In response, management stated on December 14, 2023, that GIDC funds were being requested based on project requirements, with Rs 3,790.000 million utilized up to September 30, 2023. The Petroleum Division had requested Rs 100 billion for these projects in 2017, but this request was denied by the Finance Division. The advancement of these capital-intensive projects has been stalled until the geopolitical landscape changes and the sanctions regime is lifted.
The DAC, in its meeting on December 20, 2023, directed DG (Gas) to intensify efforts to resolve the matter promptly and expedite the utilization of GIDC funds, with outcomes to be shared with the Audit team. No further progress was reported by the time the report was finalized. The audit has recommended that the Petroleum Division develop a feasible action plan to advance gas infrastructure projects and address the current energy crisis.
This issue was previously highlighted in the Audit Report for FY 2021-22, with a financial impact of Rs 322,308.775 million. The recurrence of this irregularity remains a serious concern. Ends
