Textile millers protest RLNG billing shocks, demand relief from Ogra

Textile millers have raised strong objections to the Oil and Gas Regulatory Authority (Ogra) and Sui Northern Gas Pipelines Limited (SNGPL) over significant billing discrepancies related to the re-gasified liquefied natural gas (RLNG) supplied to captive power plants. The All Pakistan Textile Mills Association (Aptma) claims these actions have imposed undue financial burdens on consumers, particularly manufacturers, and exacerbated liquidity challenges.

Aptma recently submitted a petition to Ogra, addressing the final RLNG sale prices for SNGPL consumers from April 1, 2015, to June 30, 2022. During a public hearing, millers argued that RLNG sale prices had been issued provisionally, with the expectation of timely adjustments. However, instead of being reconciled monthly or quarterly, these adjustments accumulated over multiple fiscal years.

The final adjustments were applied as a bulk charge rather than through a phased process, causing a significant financial shock. The sudden lump-sum charge affected power producers, industrial users, and compressed natural gas (CNG) station operators, turning what should have been a routine accounting process into a severe liquidity crisis for businesses.

Aptma emphasized that businesses had been charged under the existing tariffs for electricity, gas, goods, and fuel at the time of the transactions. Retrospective re-pricing, they argue, should not be imposed based on 2025 costs. Since mid-2023, natural gas tariffs for captive power plants have surged from Rs1,100 per million British thermal units (mmBtu) to Rs3,500 per mmBtu, with the new grid transition levy pushing the effective price to Rs4,291 per mmBtu ($15.4).

Aptma further criticized the retrospective billing for the period between 2015 and 2022, which SNGPL sought to collect in a single cycle. This process, they argue, created severe financial stress, especially for energy-intensive industries, worsening working capital shortages and jeopardizing the viability of these sectors.

The textile mills are now urging Ogra to intervene and address the issue, asserting that the large, lump-sum charges have compounded the financial difficulties faced by businesses already struggling with high energy costs.