Textile Mills Threaten Shutdown Over Massive Gas Bill Surprise

The All Pakistan Textile Mills Association (APTMA) has warned that Pakistan’s energy-intensive textile industry faces potential mill closures after being hit with a sudden multi-billion-rupee RLNG (re-gasified liquefied natural gas) billing shock. The retrospective charges, spanning seven years, have pushed already struggling manufacturers into a deeper working capital crisis. APTMA stated that what should have been routine price reconciliations over seven years have now become a single massive retrospective charge, threatening the viability of major manufacturing sectors, reducing exports, and accelerating mill closures. Pakistan’s textile industry has strongly objected to the sudden and retrospective RLNG billing. The association has filed a petition with the Oil and Gas Regulatory Authority (OGRA) over the matter. The petition challenges the way RLNG sale prices were finalized for consumers connected to Sui Northern Gas Pipelines Limited (SNGPL) for the period between April 2015 and June 2022. APTMA noted that the move has created a severe financial burden at a time when industries are already struggling. During a recent public hearing, APTMA representatives pointed out that RLNG prices had been issued only on a provisional basis for years, with the expectation that adjustments would be made gradually. However, instead of monthly or quarterly reconciliations, these adjustments were delayed for several fiscal years. When the prices were finally adjusted, the unpaid differences from seven years were added together and charged in one go, rather than spread out. APTMA argued that this has created a sudden liquidity crisis for industries using captive power plants, as well as CNG station operators and other large commercial users. Members noted that businesses had sold electricity, gas-based power, goods, and transport fuel according to the tariff levels that were in effect at that time. They cannot now go back and reprice past sales to match the new, higher costs. Since mid-2023, natural gas tariffs for captive power have jumped from Rs. 1,100 per mmBtu to Rs. 3,500 per mmBtu. With an additional grid transition levy of Rs. 791, the effective cost has reached around Rs. 4,291 per mmBtu ($15.4).