Ogra notifies 15.3pc increase in RLNG price for October

Islamabad: The Oil and Gas Regulatory Authority (Ogra) announced on Friday a price hike of up to 15.3 percent for Regasified Liquefied Natural Gas (RLNG) sales at the distribution stage by the two Sui gas companies for October. The increase is primarily attributed to higher crude prices following a 20 percent price reduction in September.

The rise in RLNG prices is anticipated to significantly affect fuel costs for power generation in December. In September, RLNG-based power generation costs were Rs40 per unit, based on an average RLNG import price of $10.06 per mmBtu. In comparison, October's average delivered price was $10.75 per mmBtu, $12.12 per mmBtu in August, and $18.96 per mmBtu in July.

Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) serve consumers in Sindh, Balochistan, Punjab, and Khyber Pakhtunkhwa, respectively. SSGCL's system losses at the distribution stage are 12.55 percent, while SNGPL's are approximately 9 percent. RLNG's sale price at the transmission stage for SNGPL increased by 13.9 percent to $15.94 per mmBtu for October, compared to $13.99 per mmBtu in September.

For SSGCL, the sale price at the transmission stage rose by 15.25 percent to $14.53 per mmBtu for October, compared to $12.611 per mmBtu in September. At the distribution stage, SNGPL's RLNG price increased by 14 percent to $17.33 per mmBtu, compared to $15.196 per mmBtu in September. SSGCL's RLNG sale price at the distribution stage also increased by 15.27 percent to $16.396 per mmBtu for October, compared to $14.22 in September.

Despite inherent cost additions in the supply chain, the end-RLNG price remains higher. This discrepancy is evident as the RLNG distribution prices for SSGCL and SNGPL are nearly $6.58 and $5.65 per mmBtu, respectively, higher than the average $10.75 per mmBtu delivered price ex-ship. The disparity can be attributed to profit margins charged by Pakistan State Oil, Pakistan LNG Limited, and port authorities at rates of 3.77 percent of DES price and system losses of 12.55 percent for SSGCL and 9 percent for SNGPL.