PTI govt rejected cheap tenders to buy expensive LNG that cost state Rs10b: AGP’s report
Qatari Liquefied Natural Gas (LNG) carrier “Duhail” passes through the Suez Canal. Photo AFP/file
The former government led by Pakistan Tehreek-e-Insaf’s (PTI) Imran Khan allegedly rejected tenders for cheaper stocks of Liquefied Natural Gas (LNG) and then bought stocks at exorbitant rates causing the state a loss of over Rs10 billion, audit reports have revealed.
A report of the Auditor General of Pakistan (AGP) for the fiscal year 2021-22 reviewed the practices surrounding the purchase of stocks of LNG bought by the government. The commodity is the primary fuel used in power plants.
During an audit, it was discovered that the government did not buy LNG stocks at lower bids.
Instead, it opted to buy stocks at a time when the price had soared and ultimately burdened the common man with paying for the expensive LNG.
In July 2021, the government was offered LNG at a rate of around $11.77-12.77 per Metric Million British Thermal Unit (MMBtu). Instead of buying the stocks then, the Imran-led government waited and ended up buying LNG at $13.45 per MMBtu, a loss of around $1.68 per MMBtu.
This caused a loss of Rs980 million to the exchequer.
When LNG stocks were offered at $13.78 to $14.67 per MMBtu in September, Islamabad once again showed indecisiveness and lethargy. The resultant delay meant that the country ended up buying LNG stocks at $15.19 to $15.39 per MMBtu to fulfil high demand.
The difference of $1.61 per MMBtu meant that the government had to pay an extra Rs1.48 billion from the public exchequer.
In October, LNG was offered at a rate of $13.98 per MMBtu by foreign suppliers. Once again, the government allowed the offer to lapse and ended up buying LNG stocks at a rate between $18.99-$20.28 per MMBtu.
This massive difference of $6.3 meant that the government ended up spending an extra Rs8.14 billion.
Cumulatively, the government paid an extra $10.275 billion for LNG in the last fiscal, almost all of which was passed on to the consumers.
The auditor general’s report called for ascertaining those responsible for this loss and punishing them.
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