ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has notified a cut in the average sale price of Re-gasified Liquefied Natural Gas (RLNG) by up to 3.16% for March 2023.
The RLNG price for the Sui Northern Gas Pipeline Limited (SNGPL) consumers was reduced by 2.99% or $0.41 per Million British Thermal Unit (MMBTU), while for Sui Southern Gas Company (SSGC) clients, prices have been cut by 3.17% (or $0.442/MMBTU) over the previous month, February 2023.
OGRA issued its notification on Tuesday, setting RLNG prices at $13.294/MMBTU for the consumers of SNGPL and $13.51/MMBTU for SSGC clients.
It is to be noted that LNG is pegged to the crude price. The gas price also fluctuates with the crude price movement. RLNG prices can be influenced by various other factors, such as global demand and supply, transportation costs, and geopolitical events. Therefore, RLNG prices in Pakistan, as in any other country, can be subject to fluctuations over time.
Pakistan is meeting nearly a third of its energy demands through the imports of this super-chilled fuel. Since May 2022, the government has been reducing RLNG prices for local consumers. According to data, in May 2022, the RLNG price in the local market was the highest ($21.8317/ MMBTU for SNGPL and $23.7873/MMBTU for SSGC) since Pakistan started importing LNG in 2015.
The newly notified prices of RLNG also include charges of the LNG terminals, transmission losses, port charges, and margins of the state-run importers — Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). These new weighted average sale prices of RLNG have been computed based on nine cargoes imported by PSO, while PLL imported one cargo of this super-chilled gas.
Under two long-term contracts with Qatar, PSO is procuring LNG at 13.37% of Brent and 10.20% of Brent respectively. Five cargos were procured at a slope of 13.37% of Brent while three at 10.2%. For the last eight months, PLL has procured one cargo per month, except for February when it made no procurement.
The newly announced prices were lower for SNGPL and higher for SSGC when compared with the prices in the same month of last year. Last year in March 2022, the RLNG price was $15.813/ MMBTU for SNGPL and $17.115/ MMBTU for SSGC consumers.
LNG is an important source of energy for Pakistan, as its local natural gas reserves are limited and fast depleting so it heavily relies on imported LNG to meet its energy needs.
The import of LNG has helped Pakistan to bridge the gap between demand and supply of natural gas, and to meet the energy needs of various sectors such as power generation, industry, and transportation.