SNGPL refrained from charging high gas tariffs to the textile industry

LAHORE: The Lahore High Court granted provisional measures to 78 textile units against the high gas tariff introduced by the government and ordered Sui Northern Gas Pipelines Limited (SNGPL) to issue revised invoices at a preferential tariff of 6 , $ 5 / mmbtu.

The petitioners had challenged the increase in gas tariffs in the Lahore High Court and the defendants in the case included the Federation of Pakistan, the Oil and Gas Regulatory Authority (OGRA) and Sui Northern Gas Pipelines Limited ( SNGPL).

Representing the textile industry, Salman Akram Raja and Malik Kashif Rafique Rijwana argued that the applicants were textile industrial units which were also involved in the production of electricity for home consumption, but did not sell the surplus. Therefore, they do not fall under the definition of “captive power unit” according to the law established by the Honorable Supreme Court in the judgment of March 21, 2019 in civil appeal.

Counsel further argued that the applicants were treated as captive power plants and instead of applying a preferential rate of $ 6.5 / mmbtu, they were billed $ 9 / mmbtu according to the dated revised rate. of November 30, 2021.

They further argued that in related cases opinions have already been issued and provisional measures granted; that’s why they prayed for the same relief.

Lahore High Court Judge Muhammad Sajid Mehmood Sethi during the proceedings, ordered that notices to the defendants be issued and the petition and related matters heard on January 19, 2022.

As interim relief has already been granted in the related case, therefore, to maintain consistency, until the next hearing date, the Respondent SNGPL was ordered to issue a revised invoice to the Applicants at a prime rate of $ 6.5 / mmbtu within two days. , which is expected to be tabled by the petitioners within the next three working days.

It should be mentioned that the textile industry, disappointed with the massive rise in gas prices, decided to challenge the upward revision to avoid negative implications.

According to recent correspondence with members, the All Pakistan Textile Mills Association (APTMA) noted that the government has increased the rate of regasified liquefied natural gas (RLNG) from $ 6.5 to $ 9 / mmbtu for sectors oriented towards export.

The stakes are very high, especially for the industry located in the Punjab, as the continuous gas supply at $ 6.5 / mmbtu to the entire value chain as approved by the cabinet until June 2022, is the only source of energy that can be exploited for their viability and competitiveness, namely at the regional level and at rest. from the country.

High-profile Regional Energy Tariff Policy (RCET) was identified as vital for the competitiveness of the domestic textile sector, as the economic importance of the textile sector in Pakistan was undeniable due to the lion’s share of exports, according to a study. from the country. .

The sector contributes over 60 percent of total export earnings and provides employment opportunities to around 40 percent of the workforce.

The recent success of the textile sector could be partly attributed to the RCET policy adopted by the government at the end of 2018. As part of the RCET policy, the government is proposing a regionally competitive RLNG / gas tariff at the rate of $ 6.5 / mmbtu, in addition to a similar concessional electricity. rate. In August of this year, the current government extended a mix of local gas and RLNG to export-oriented industry across the country.

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