K-Electric has proposed paying approximately Rs5.73 billion to Pakistan LNG Limited (PLL) in nine monthly instalments as the companies remain in dispute over the pricing of imported gas.
The Karachi-based electricity utility has offered the payments under protest, maintaining that the final amount should be adjusted once the applicable pricing mechanism is settled.
Nine-month payment proposal
According to reporting published on November 3, K-Electric proposed monthly payments of approximately Rs636.5 million from October 2026 to June 2027.
The amount relates to a pricing difference for regasified liquefied natural gas (RLNG) supplied during May and June 2026.
The proposal followed PLL’s demands to two banks on October 16 to encash standby letters of credit worth approximately Rs5.73 billion.
K-Electric subsequently approached the Sindh High Court, which issued an order on October 19 restraining coercive action, including encashment of the bank guarantees.
Disagreement over gas pricing
The dispute centres on the rates charged for RLNG supplied during a period of exceptional supply arrangements.
K-Electric argues that PLL charged the utility using spot-market LNG prices despite a government-approved unified or weighted-average pricing mechanism intended to distribute costs among consumers and gas buyers.
The utility says the revised pricing mechanism has not yet been implemented.
K-Electric also claims approximately Rs9.9 billion in outstanding credits relating to disputed gas pricing and earlier supply periods. These amounts represent the company’s claims and have not been established as final settlements.
Conditions for payment
K-Electric has requested that PLL withdraw its bank guarantee encashment notices and waive late-payment surcharges as part of the proposed arrangement.
The company says any payments would remain subject to adjustment against the final amount determined under the applicable pricing mechanism.
The dispute highlights financial pressures arising from imported fuel costs and unresolved pricing arrangements in Pakistan’s energy sector.