Sui Northern Gas Pipelines Limited (SNGPL) has clarified that the Cost Equalisation Adjustment (CEA) matter does not have any financial impact on its current or future profitability following a recent Lahore High Court ruling. In a disclosure to the Pakistan Stock Exchange on Thursday, the company said that the matter pertains to a disputed tax demand arising from the disallowance of CEA by tax authorities. The CEA was remitted to SSGCL under a mechanism mandated by the Economic Coordination Committee (ECC) and duly approved by the federal government as well as Oil and Gas Regulatory Authority (OGRA) in 2003, aimed at ensuring uniform gas pricing across the country.
The related expenditure is historical in nature and has already been recorded in the Company’s financial statements. It has also been duly recognised in OGRA’s tariff determinations for the relevant periods. Accordingly, it does not have any incremental financial impact on the current or future profitability of the Company.
SNGPL said that the Honourable LHC has decided the matter in the company’s favour by holding that the expenditure qualifies as being “wholly and exclusively for the purpose of business.” The company further noted that the reported development does not give rise to any new financial obligation, liability, or adjustment, nor does it have any bearing on the Company’s current or future financial position. SNGPL further stated that the matter does not constitute price-sensitive information, as it has already been accounted for and remains financially neutral, while confirming compliance with all regulatory and disclosure requirements.