FPCCI challenges retrospective RLNG debits

KARACHI/LAHORE: The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has objected to retrospective “actualisation” debits raised by Sui Northern Gas Pipelines Limited (SNGPL) on RLNG supplies to the industrial sector and urged the Oil and Gas Regulatory Authority (Ogra) to provide relief, calling the move unjustified.

In a letter to the Ogra chairperson, seen by The News, the apex trade body said that following the start of LNG imports in 2015, the government brought RLNG under the petroleum products pricing framework through S.R.O. 405(I)/2015. Subsequent ECC decisions directed Ogra to determine ring-fenced RLNG prices monthly, with adjustments only after verification of cargo costs, foreign exchange settlements, terminal charges and unaccounted-for gas (UFG).

The FPCCI said RLNG volumes and prices were required to remain ring-fenced for UFG benchmarking and not be passed on to system-gas consumers. It added that OGRA’s audits confirm industrial bulk consumers incur only 0-3 per cent UFG, yet the July debits incorrectly applied a system-average of 8-12 per cent.

The association urged Ogra to convene a hearing, share all working papers for verification, and recommend tariff rationalisation -- including terminal charges, port fees, importer margins and UFG benchmarks -- within one month.

It also called for proportionate credits where costs were previously recovered without corresponding service, restitution for past excess charges, and a distinct UFG benchmark for industrial consumers set at 0-3 per cent going forward.

The FPCCI further asked Ogra to ensure RLNG recoveries are not imposed retrospectively beyond the statutory tariff cycle and that all future adjustments are applied prospectively.

In a separate statement, the Pakistan Business Forum (PBF) Lahore Chapter has strongly opposed SNGPL move to issue nearly Rs72 billion in backdated bills to industries, citing RLNG price adjustments from April 2015 to June 2022. The demand stems from a March 2025 notification issued by the Oil and Gas Regulatory Authority (Ogra).

Calling the decision a dangerous precedent, PBF Lahore President Muhammad Ejaz Tanveer said it reflected regulatory failure rather than consumer default. “Industries are being penalised for Ogra’s negligence in notifying prices for seven years. Such a retroactive burden is unjust, especially when industries are struggling to stay afloat,” he said.

The PBF argued the billing was unconstitutional, violating rights to livelihood, trade, and property, and contravened Article 77 of the constitution, which requires parliamentary approval for financial impositions.

The PBF announced plans to file a constitutional petition before the Supreme Court and High Court, naming Ogra, SNGPL, Pakistan State Oil (PSO), Pakistan LNG Limited (PLL) and the federation of Pakistan as respondents, seeking urgent judicial intervention to prevent a wider financial crisis.

It linked the dispute to flawed LNG contracts as well as years of regulatory inertia, which had unfairly shifted costs onto industries. The PBF demanded withdrawal of the retrospective bills, an independent audit of LNG agreements and a permanent ban on such adjustments. It also announced plans to mobilise parliamentary bodies and provincial governments to push for corrective action at the federal and provincial levels.