ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has been compelled to hold a public hearing to revise the past 10-year prices of Regasified Liquefied Natural Gas (RLNG) following agitation and litigation by various consumer groups. The revision involves an additional financial impact estimated at around Rs150 billion.

Under court directions, Ogra will hold a hearing on Nov 6 to “actualise” RLNG prices from April 2015 onwards. The regulator has been issuing monthly RLNG sale prices to Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL) on a provisional basis without public consultation, despite requirements under the Ogra Ordinance and government policy guidelines.

According to Ogra’s notice, the RLNG prices have been determined based on various cost components, including imported gas quantities, transmission and distribution losses, port and terminal charges, import-related costs, margins of Pakistan State Oil (PSO) and Pakistan LNG Ltd (PLL), exchange rate adjustments and other supply costs.

In July 2023, SNGPL submitted to Ogra the actualisation data provided by all stakeholders, supported by audited accounts. Ogra subsequently notified revised RLNG prices on Dec 24, 2024, and again on Mar 28, 2025, on an actual basis. These revisions led to retrospective billing, creating an unexpected financial burden for industrial and CNG consumers, who took the matter to the prime minister and courts.

Hearing fixed for Nov 6 over Rs150bn retrospective gas bill dispute

Ogra sources said the Lahore High Court’s Multan Bench, in a ruling on Sept 11, 2025, observed that it was against principles of fairness to impose backdated charges without first hearing consumers affected by earlier sales. The court directed Ogra to provide all stakeholders with an opportunity to present their positions before issuing final decisions.

In compliance, Ogra has decided to hold a public hearing, inviting all RLNG consumers, stakeholders and petitioners from other courts to share their comments and objections regarding RLNG sale prices from April 2015 to June 2022.

Separately, Prime Minister Shehbaz Sharif in August ordered an independent inquiry led by a former federal secretary after some influential industrial groups raised concerns over back-billing amounting to Rs50bn. The outcome of that investigation has not yet been disclosed. Following Ogra’s revised notifications, SNGPL issued bills for the seven years from April 2015 to June 2022.

The backdated amounts include Rs14.4bn for the industrial sector, Rs40bn for the power sector — costs ultimately borne by electricity consumers — Rs3.8bn for CNG stations, and Rs2.4bn for fertiliser manufacturers. Total liabilities of about Rs61bn include Rs51.3bn in differential gas charges, Rs8bn in sales tax, and late payment penalties.

Around 2,950 industrial consumers and 1,200 CNG station owners have protested, arguing they cannot pass on the retrospective costs as products sold years ago cannot be repriced. They have sought government relief, citing financial hardship and legal grounds.

This dispute comes on top of Rs76bn in subsidy claims pending with the government. The RLNG price differential above the capped rates for export-oriented and fertiliser sectors is treated as a subsidy payable by the state, while recoverable amounts have been billed to consumers.

Both Ogra and SNGPL have blamed each other for the regulatory lapse. SNGPL maintains that Ogra issued actualised RLNG prices for April 2015-June 2022 in December 2024, but later withdrew them for revision after PSO and PLL submitted amended claims. Ogra informed SNGPL in February 2025 that revised notifications would be issued after incorporating these updates.

The regulator eventually reissued RLNG tariffs on Mar 28, 2025, covering 84 months. SNGPL subsequently billed consumers for the differential amounts under gas sales agreements. Prices for FY23-FY25 remain under consideration and are expected to be finalised later.

Published in Dawn, October 31st, 2025