ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has increased the prices of Liquefied Natural Gas (LNG) by 0.86 per Million British Thermal Unit (MMBTU) for the month of May 2024.
According to OGRA’s notification, the price of LNG has been raised by $0.80 per MMBTU for Sui Northern Gas Pipelines Limited (SNGPL) and the new price of LNG for SNGPL has been fixed at $13.74 per MMBTU.
LNG price for Sui Southern Gas Company (SSGC) has been jacked up by $0.86/MMBTU and the new price is set at $14.05 per MMBTU.
“The increase in RLNG prices is mainly due to increase in DES (Delivered Ex-Ship) price,” said OGRA in a statement.
It is relevant to note that DES is a pricing mechanism that values LNG delivered at its final location. Under such transactions, ownership of LNG transfers to the buyer as it is unloaded at the receiving terminal.
As per sources of energy sector, the hike is aimed at maintaining the sustainability of LNG supplies and ensuring that the economic balance is maintained despite fluctuations in the international market.
The decision to increase LNG prices is driven by several factors, including the rising prices of LNG in the international market, fluctuations in supply and demand, and the need to ensure a steady and reliable supply of energy to meet the country’s growing needs.
OGRA’s move is part of a broader strategy to adjust domestic energy prices in line with global trends, ensuring that the energy sector remains viable and sustainable.
It is pertinent to mention that consumers are expected to feel the impact of these increased price, particularly in sectors heavily reliant on LNG.
The industrial sector, which uses LNG for various manufacturing processes, might see an uptick in production costs, potentially leading to higher prices for end consumers. Similarly, domestic users might experience increased utility bills as the new rates take effect.
