Pakistan LNG Limited warns K‑Electric of possible RLNG supply cut over Rs8.7 billion arrears
PLL has issued a fresh notice to K‑Electric demanding immediate payment of Rs8.7 billion, threatening to halt RLNG deliveries if the dues are not cleared, amid a dispute over a proposed pooled pricing mechanism.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Power and Oil & Gas sectors face payment‑related risk; avoid buying PPL and watch related power stocks.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- PowerNegatively affected
- Oil & GasNegatively affected
Companies
Companies Mentioned
- PPL· Negatively affected · Do not buy
Mentions in This Briefing
Sectors: Power, Oil & Gas — Negative · Do not buy. PSX tickers: PPL. Power and Oil & Gas sectors face payment‑related risk; avoid buying PPL and watch related power stocks.
Full Story
Open on Business Recorder## Background
Pakistan LNG Limited (PLL) sent a second warning to K‑Electric (KE) on 8 September 2026, stating that the power utility owes Rs8.7 billion – Rs8.5 billion in principal and Rs0.2 billion in late‑payment surcharge (LPS). The amount remains unpaid despite a National Coordination and Management Council (NCMC) directive that KE settle its dues as a priority.
## Pricing dispute
The stalemate stems from KE’s attempt to apply a weighted‑average or pooled RLNG pricing formula that it believes should reduce its payment obligations. PLL contends that the NCMC only instructed stakeholders to examine the proposal; it has not been approved by the Economic Coordination Committee (ECC) nor notified by the Oil and Gas Regulatory Authority (OGRA). Under the existing Gas Sale Agreement (GSA), invoicing must follow the OGRA‑published RLNG price, and any new mechanism cannot be enforced unilaterally.
## PLL’s position
PLL reiterated that it will continue supplying RLNG in the national interest but warned that the growing receivables are jeopardising its ability to meet payments to international LNG suppliers. It emphasized that the LPS is an automatic charge under the GSA, not a discretionary fee, and that KE must pay the full outstanding amount without further delay. Failure to do so could trigger PLL’s contractual right to cease RLNG deliveries and pursue legal remedies.
## KE’s response
K‑Electric maintains that it has not defaulted and points to the July 1 2026 NCMC meeting, where participants, including KE, agreed to a unified weighted‑average pricing mechanism under force‑majeure conditions. KE has asked for expedited implementation of the mechanism to reconcile pricing and payments retroactively from May 2026.
## Market implications
The dispute raises concerns over the continuity of RLNG supplies to Karachi’s largest power utility, potentially affecting power generation costs and the financial health of PLL. Investors should monitor any escalation that could lead to supply interruptions or further legal actions.