Pakistan has booked 11 cargoes of liquefied natural gas (LNG) to be imported during March to partially bridge the deficit part of the fuel in the growing domestic economy.
The imports would, however, be made at an eight-month high price at $9.59 per metric million British thermal unit (mmbtu).
According to a local media report, the government would make the expensive imports partly due to uptrend in the energy prices at global markets for the past couple of months and partly due to signing of 15-year long LNG import agreement with Qatargas at a higher rate by the previous government in the centre.
The rate is pegged with the trend in the international benchmark crude Brent’s price. The costly imports would keep it challenging for the government to control inflation and check its expenditures.
Both the import bill and amount of subsidies the government pays on LNG supplies to manufacturing and export sectors would rise whereas the public would pay the price for the imports which are a must due to deficit production of local gas.
Pakistan would import LNG at around February’s eight-month high level of $9.59 per mmbtu.
The import price – including terminal charges, profit margins, transmission & distribution losses and other costs – stood at slightly over $6 per mmbtu in June 2020, AHL Research reported citing Oil and Gas Regulatory Authority (OGRA).
It is pertinent to mention here that the import price of RLNG is pegged with Brent, which is on the rise for the last several months. Brent is trading at one-year high over $68 per barrel at world markets these days, he said. Oil may hit $70 per barrel ahead of the return of summer season in June-July when demand of energy peaks every year, according to other local and international research houses.
The increase in import price would also take amount of cross subsidies to be paid by the government to the export sectors.
