The Oil and Gas Regulatory Authority (OGRA) has increased regasified liquefied natural gas (RLNG) prices by up to 15.3% for October, raising the cost of gas supplied by both Sui gas companies.
The latest increase follows a 20% reduction in RLNG prices in September and is mainly attributed to higher international crude oil prices.
The increase is also expected to affect fuel costs for power generation in December. RLNG-based electricity generation cost Rs40 per unit in September, when the average LNG import price stood at $10.06 per million British thermal units (mmBtu). This import price increased to $10.75 per mmBtu in October.
The average delivered ex-ship (DES) price of LNG from two cargoes also rose to $10.75 per mmBtu in October, compared with $10.06 in September, $12.12 in August, and $18.96 in July.
SNGPL and SSGCL Face Higher RLNG Rates
According to OGRA’s notification, the RLNG sale price for Sui Northern Gas Pipelines Limited (SNGPL) increased by 13.9% at the transmission stage, reaching $15.94 per mmBtu in October against $13.99 in September.
At the distribution stage, the price increased by 14% to $17.33 per mmBtu from $15.196 per mmBtu.
Similarly, the RLNG transmission price for Sui Southern Gas Company Limited (SSGCL) increased by 15.25% to $14.53 per mmBtu from $12.611 per mmBtu in September.
The company’s distribution-stage price also climbed by 15.27%, reaching $16.396 per mmBtu compared with $14.22 in the previous month.
SSGCL supplies gas to consumers in Sindh and Balochistan. Its distribution system losses currently stand at 12.55%, compared with approximately 10.6% last year.
Meanwhile, SNGPL serves consumers in Punjab and Khyber Pakhtunkhwa. Its distribution losses were reported at nearly 9%, against 7.47% in October last year.
Distribution Costs Push RLNG Prices Higher
The difference between LNG import prices and the rates charged to consumers highlights the additional costs involved in the supply chain.
Although the average delivered LNG price stood at $10.75 per mmBtu in October, the distribution-stage price reached $16.396 for SSGCL and $17.33 for SNGPL. These rates are $5.65 and $6.58 higher than the average import price, respectively.
The additional costs include charges and margins collected by public-sector entities involved in importing and supplying LNG. Pakistan State Oil (PSO), Pakistan LNG Limited (PLL), and port authorities charge margins related to retainage and other services, amounting to 3.77% of the delivered ex-ship price.
These charges come on top of distribution system losses of 8.97% for SNGPL and 12.55% for SSGCL.
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