KARACHI: Sui Northern Gas Pipelines Limited (SNGPL) has clarified a disputed tax demand raised by authorities, stating that the issue is historical in nature and will not impact the company’s current or future financial position.
In a communication submitted to the Pakistan Stock Exchange (PSX), the company addressed recent media reports concerning a decision by the Lahore High Court (LHC) related to the Cost Equalization Adjustment (CEA).
SNGPL explained that the matter originates from a long-standing tax dispute over the disallowance of CEA by tax authorities. The company noted that the adjustment mechanism was introduced in 2003 by the Economic Coordination Committee (ECC) and subsequently approved by the federal government and the Oil and Gas Regulatory Authority (OGRA) to ensure uniform gas pricing across Pakistan.
According to SNGPL, the relevant expenditure had already been recorded in its financial statements and incorporated into OGRA’s tariff determinations for the applicable periods. Therefore, the company emphasized that there would be no additional financial impact on its profitability.
Referring to the court ruling, SNGPL stated that the Lahore High Court had decided the matter in its favor, recognizing the expenditure as “wholly and exclusively for the purpose of business.”
The company further clarified that the development does not create any new financial obligation or liability and does not affect its current or future financial standing.
SNGPL reaffirmed its compliance with all regulatory and disclosure requirements, adding that the matter does not constitute price-sensitive information as it has already been accounted for and remains financially neutral.