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Oil ministry slipping: CAG

india Updated: Jun 22, 2006 02:33 IST

The Comptroller and Auditor General (CAG) has pointed out glaring misuse of funds and irregularities in accounts by the Petroleum Ministry and the state-owned oil companies in the last ten financial years.

The irregularities range from extra payment of TA and DA to employees in oil companies and the ministry to defaults in repayment of external loans by oil companies.

After receiving the CAG letter earlier last month, the Petroleum Ministry has now directed all its department heads to explain the irregularities.

The CAG has been particularly unhappy over exorbitant guarantee fees the oil companies forked out after having defaulted in the repayment of foreign loans to bilateral and multilateral agencies. Since the central government has guaranteed most of these foreign loans from 1996 to 2003, the oil companies owe penalty dues worth Rs 200 crore. The CAG has questioned the Petroleum Ministry as to why the penalties on guarantees have not been recovered from cash-rich oil companies like ONGC and GAIL.

The CAG has pointed out discrepancies in the outstanding GAIL loans worth over Rs 4.73 crore with Asian Development Bank. It has also raised objection to the "infructuous expenses" worth Rs 38.63 crore incurred by ONGC in phase two of the sweetening plant at Hazira in Gujarat.

The audit teams have also pointed out large-scale discrepancies in the investments made by oil companies and subsidy disbursement on LPG. Scrutiny of Gas Linkage Committee (GLC) records have also pointed out the tardy manner in which gas was allotted to 'fall-back consumers' who do not have any legal claim on continuity of gas supplies.