High Court rules in favour of SNGPL regarding cutting in RLNG UFG allowance case

July 19, 2021 (MLN): Sui Northern Gas Pipelines Limited (SNGPL), in an announcement to Pakistan Stock Exchange said that the Honorable Lahore High Court concluded the case regarding cutting unaccounted for gas (UFG) allowance on the RLNG consumers of the distribution segment in favour of the company.

The decision came today after hearing both the parties at length and announced in the open court that SNGPL’s petition is allowed. The written decision is, however, awaited.

To recall, in a surprise move last year, OGRA decided to cut UFG allowance on the RLNG distribution network to 6.3%, effective Aug’20. Prior to this, OGRA and the Cabinet had established clear guidelines for RLNG: UFG incurred on the RLNG network was a pass on the item i.e., fully allowable expense (which was 10.67% for the distribution network of SNGP and 17.11% for SSGC), as per report by Arif Habib Limited.

Albeit, in a bid to treat RLNG consumers in the same manner as natural gas consumers, this was slashed to 6.3%, as can be seen in the monthly RLNG notified prices. However, SNGPL, being aggrieved by the Regulator’s decision, filed a petition in the Lahore High Court challenging the RLNG price determinations.

With the final hearing of the case scheduled today, the decision has finally been called in favor of SNGP by the Lahore High Court ruling out the possibility of any cut in the RLNG UFG benchmark.

This decision will, however, have no impact on the financial results for the first quarter ended September 30, 2020 already declared as the company was confident of a favourable decision in this regard, the notice issued by the company said.

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