OGRA notifies 3.2% hike in RLNG prices

The Oil and Gas Regulatory Authority (Ogra) announced an up to 3.2% increase in the prices of Regasified Liquefied Natural Gas (RLNG) for August 2024, citing rising international costs and system losses as key factors. 

The new prices, which took effect from August 1, 2024, have been outlined in an official notification.

For consumers of Sui Northern Gas Pipelines Limited (SNGPL), the RLNG price at the transmission stage has been raised by 2.95% to $13.06 per million British thermal units (mmBtu) from $12.68 in July. 

At the distribution stage, the price increased by 2.97%, bringing the new rate to $14.01 per mmBtu, up from $13.60 per unit in the previous month.

Similarly, for Sui Southern Gas Company Limited (SSGCL), the price at the transmission stage has been increased by 3.19% to $11.89 per mmBtu from $11.53 in July. 

The distribution price for SSGCL has risen by 3.20% to $13.58 per mmBtu, compared to $13.15 last month.

Ogra’s decision comes as both SNGPL and SSGCL grapple with high system losses, commonly referred to as unaccounted for gas (UFG). SSGCL’s losses stood at 13.14%, slightly down from 14.5% last year, while SNGPL’s losses increased to 9.65% from 8.61% in the previous year.

The RLNG distribution prices for SSGCL at $13.58 per mmBtu and $14.01 per mmBtu for SNGPL are notably higher than Pakistan State Oil’s average delivered price of $10.97 per mmBtu. This discrepancy is attributed to profit margins and retainage charges imposed by LNG importers, as well as the system losses faced by the two gas companies.

The adjusted RLNG prices are based on a total of 11 cargos for August, including 10 cargos under contracts with Qatar at an average of $10.08 per mmBtu, and an additional cargo imported by Pakistan LNG Ltd (PLL) at $10.10 per mmBtu.

Ogra’s notification has received mixed reactions from industry stakeholders, with concerns about the potential impact on sectors reliant on natural gas.