PESHAWAR: The Peshawar High Court has suspended the Oil and Gas Regulatory Authority’s last month notification of gas price hike for textile mills with captive power plants.

A bench consisting of Justice Ijaz Anwar and Justice Syed Arshad Ali declared that the impugned notification would remain suspended to the extent of the petitioners, including Khyber Pakhtunkhwa Textile Mills Association and five textile mills in the province, and they would pay their monthly bills on basis of last year tariff determined on Nov 8, 2023.

It directed petitioners to deposit post-dated cheques with the court for the differential amount.

The bench directed the respondents, including the secretary of the energy ministry (petroleum division), Ogra director general, and Sui Northern Gas Pipelines Limited chief executive, to file their comments on the petition within a fortnight.

Seeks response of govt, gas companies on matter

The petition is jointly filed by the KP Textile Mills Association, Gadoon Textile Mills, and four others requesting the court to declare the impugned notification of July 1 unconstitutional and illegal.

The petitioners questioned the increase in gas tariff for captive power users, including the petitioners.

Senior counsel Shumail Ahmad Butt appeared for the petitioners and argued that their clients purchased gas from SNGPL through contractual arrangement and the determination of tariff was regulated under the Ogra Ordinance, 2002.

He said any tariff increase had to be based on annual tariff determination by Ogra.

The lawyer said under Section 8 of the Ogra Ordinance, the authority “determined and advised the federal government an estimate of the total revenue requirement of the SNGPL and the sale price to the consumers and in turn the federal government, in the next 40 days, should send an advice to the authority about the minimum charges and the sale price for various categories of retail consumer for natural gas.”

He argued that when SNGPL approached Ogra for tariff increase, it determined that the SNGPL had earned more than its revenue requirement and instead should give benefits to consumers.

Mr Butt said that Ogra had actually proposed reduction of tariff by Rs179 per mmbtu for all categories.

He added that the federal government didn’t agree to the advice and instead notified that tariff for all kinds of consumers at the rate prevalent for the last year, with the exception of the captive power consumers, including petitioners.

The lawyer said that the general industry (captive power) was singled out and their tariff was increased from Rs2,750 per mmbtu to Rs3,000 that was without any legal basis.

He contended that the federal government had no structured criteria for determination of the tariff for various categories in terms of Section 8(3) of the ordinance and so, the tariff determination and advice by Ogra for each category had to be notified without any change.

Deputy attorney general Sanaullah Khan and lawyer for SNGPL Yasir Saleem opposed interim relief for the petitioners, insisting the interim and final relief sought by the petitioners was almost the same.

They added that the tariff was determined by Ogra and the government strictly in accordance with Section 8 of the ordinance, so it didn’t call for interference.

While granting interim relief to the petitioners, the bench observed that there appeared to be no justification for the federal government to single out the general industry (captive power) by enhancing tariff rate.

Published in Dawn, August 17th, 2024