DG Oil asks refineries to deposit above Rs1.31bn amount pointed out by the audit

The Ministry of Energy’s Directorate General (Oil) has asked the refineries to justify or deposit the amount of Rs1.3 billion, revealed by an audit, into the government relevant account immediately.

In a letter with subject “Audit & Inspection Report in Respect of Compliance with Authority Audit of Non-Tax Receipts Maintained by (PARCO, BYCO, NRL, PRL) Karachi for the Financial Year 2021-22 (Audit Year 2022-23) dated 14th November 2022”, Directorate General (Oil) (Petroleum Division-Policy Wing) of Ministry of Energy has requested the companies to either justify their position or deposit the amount revealed by the audit into the relevant Government accounts immediately. The companies must also then get it verified from the Audit Office Karachi and revert back to the office of DG (Oil).

According to the report, the refineries have not paid the discount retained on local crude oil price worth Rs 285.383 million. Similarly, the refineries also did not pay windfall levy retained on local crude oil worth Rs 1.02 billion.

It is pertinent to note that Pak Arab Refinery Company Limited (PARCO) replied with the following statement, “PARCO’s amount pertaining to discount (Rs82.7 million) and windfall levy (Rs335.2 million) was timely paid to the government and challans duly shared. Our response to the referred letter has been submitted to the relevant authority.”

When contacted by Profit, the Managing Director (MD) and Chief Executive Officer (CEO) of PRL said this is a very routine audit observation made every year.

He said that normally refineries pay the retained windfall levy after a lag of a few months. He further added that, this retained money has already been paid back to the government and records have been shared with the relevant authorities.

For PRL, the amount was only Rs 3.2 million which has already been paid, said Zahid Mir, MD & CEO, PRL. He added that the outstanding amount relating to PRL has subsequently been paid, and at the moment no outstanding amount is pending relating to PRL.

Sources in the oil industry told Profit that BYCO is not getting local crude oil. Consequently non-payment of discount retained and windfall levy retained on local crude oil prices is out of the question.