Pakistan’s textile sector is facing an unprecedented crisis after a sudden multi-billion-rupee RLNG (re-gasified liquefied natural gas) billing shock threatened the survival of energy-intensive mills. The All Pakistan Textile Mills Association (APTMA) has warned that retrospective charges spanning seven years have pushed already struggling manufacturers into a severe liquidity crunch, raising concerns over potential mill closures and export setbacks.
APTMA explained that routine price reconciliations for RLNG, which should have been staggered over the years, were instead consolidated into a single massive retrospective charge. The association has filed a petition with the Oil and Gas Regulatory Authority (OGRA), challenging how RLNG sale prices were finalized for consumers connected to Sui Northern Gas Pipelines Limited (SNGPL) from April 2015 to June 2022.
The industry says the sudden billing surge comes at a time when many manufacturers are already grappling with rising costs. During a public hearing, APTMA representatives highlighted that RLNG prices had been issued provisionally for years with the expectation that adjustments would occur gradually. Instead, the deferred adjustments were bundled together, causing an immediate financial shock.
This sudden hike has created liquidity challenges for industries operating captive power plants, CNG stations, and other large commercial users. Businesses argue that they sold electricity, gas-based power, goods, and transport fuel at the tariffs effective at the time and cannot retroactively reprice past sales to offset the new charges.
Since mid-2023, natural gas tariffs for captive power have surged from Rs. 1,100 per mmBtu to Rs. 3,500 per mmBtu. Including an additional grid transition levy of Rs. 791, the effective cost has soared to Rs. 4,291 per mmBtu ($15.4), intensifying the financial strain on Pakistan’s textile sector.