ISLAMABAD: The Auditor General of Pakistan (AGP) has pointed that subsidy of Rs 28 billion extend to export oriented sectors in violation of ECC’s decision.
AGP, in its report of audit year 2023-24 has revealed that according to ECC’s decision dated July 25, 2022, there shall be quarterly review of the subsidy provided to export industry for both gas and electricity.
A report will be prepared by the Petroleum Division providing list and amount of all captive units of export-oriented sector who are getting subsidy on account of supply gas / RLNG and subsidized electricity.
The report shall be presented to ECC within one month. Further, ECC in its decision dated August 16, 2021, constituted a committee under the convenorship of the Minister for Energy to deliberate the issue of misuse of RLNG supply at concessional rates to export oriented industry and submit viable recommendations to ECC for consideration.
During audit of DG (Gas) for the FY 2022-23, serious irregularities were observed in supply of RLNG supply at concessionary rate to export oriented sector scheme which included
(i) missing quarterly review of subsidy provided to export industry showing the list of entitled consumers, contractual load
(ii) actual RLNG supplied along with consumer wise export data was not available
(iii) verification with MoC and FBR was not ensured to ascertain that customers included in the claims had actually exported the goods manufactured by utilization of subsidized RLNG during the period of claim
(iv) no mechanism for 3rd party audit / pre-audit of claims was devised. Despite all these shortcomings, DG (Gas) released Rs 28,224.000 million on account of subsidy claims in respect of subsidized RLNG during 2022-23.
Further, report of the committee constituted by the ECC under the convenorship of Minister of Energy to address the issue of misuse of RLNG supply at concessionary rate was not provided to Audit. Audit was of the view that due to weak monitoring by DG (Gas), subsidy claims were paid without proper pre-audit and instructions of the ECC were not complied with. The matter was reported to the management in September, 2023. The management in its reply dated December 14, 2023 stated that verified claims were submitted to Finance Division on monthly basis before any release with all details related to each consumer availing the tariff. Therefore, submission of separate report to the ECC was not required. The management further, stated that based on the recommendations of Committee constituted under Convenorship of MoE, a summary was submitted which was accordingly considered by the ECC.
The reply was not tenable as no report was provided to Audit. The DAC in its meeting dated December 20, 2023 directed the DG (Gas) to take up the matter with competent forum for regularization of non-implementation of ECC’s directives.
According to Audit, no further progress was reported till finalization of the report. Audit recommends to probe the irregularities and submit its findings before competent forum for appropriate action.
