The government has decided that any losses arising from the diversion of LNG cargoes under the Net Proceed Differential (NPD) clause will no longer be absorbed by the state and will instead be passed directly to RLNG consumers, The News reported, citing senior officials in the Petroleum Division.
Officials said Pakistan is currently negotiating with Qatar on the diversion of 24 to 29 LNG cargoes in 2026, which Qatar will confirm by November 30. Under the NPD arrangement, profits from selling diverted cargoes at higher international market prices go entirely to Qatar. But if the cargo sells below Pakistan’s term price, the loss must be borne by Pakistan State Oil (PSO).
The government has now decided PSO will not absorb these losses. Instead, the cost will be transferred to RLNG users, including four RLNG-based power plants, export-oriented industries and new domestic consumers tied to RLNG-linked tariffs.
In its latest determination, OGRA projected a Rs48 billion positive impact from potential diversions and assumed domestic consumers would continue receiving local gas at Rs1,000 per MMBTU, instead of the RLNG-linked Rs3,500 per MMBTU, until June 30, 2025. Officials, however, questioned whether the regulator had accounted for possible losses from diverted cargoes.
Passing losses to consumers is expected to push up RLNG prices across power generation, industrial output and household usage. Higher RLNG-based electricity costs, steeper industrial fuel tariffs and costlier domestic connections are among the anticipated impacts.
Despite this, the government estimates Pakistan could save $339.6 million in foreign exchange if Qatar approves the diversion plan, based on a term cargo price of $28.3 million per shipment.
Sources noted that Pakistan’s surplus RLNG could have been managed earlier. In October 2024, a series of meetings involving SNGPL, SSGCL, PSO and Pakistan LNG Limited recommended diverting 37 cargoes, as spot prices remained higher than Pakistan’s contract rates throughout 2025. PSO did not move ahead with the plan, resulting in further operational strains.
