The controversy regarding procurement of LNG cargo by Pakistan State Oil (PSO) at record high rate of $20.055 per mmbtu settled down after the Oil and Gas Regulatory Authority (Ogra) withdrew the notification of increasing LNG price.
Ogra had notified increase in tariff of LNG on Monday based on tentative rate of $20.055 per tariff rate imported by PSO. However, the regulator withdrew it after PSO informed that it had already cancelled the tender.
This shows how the regulator and PSO were dealing with the affairs as according to PSO, it had cancelled the tender on July 27. It seemed that PSO had not informed the regulator about the cancellation of a bid, which calculated price at $20.055 per mmbtu LNG rate.
Interestingly, the August weighted prices of RLNG had been worked out by Ogra on the advice of Ministry of Energy, and no objection had come from any quarter even after 12 hours of the announcement of the RLNG prices by the regulator. In its notification for the month of August, Ogra had clearly mentioned that the August price for one cargo of PSO was 27.8675% of Brent, which can be translated into monetary term of $20.055 per unit LNG.
The price of five cargoes from Qatar was 13.37% of Brent, which is almost half of the spot purchase. Ogra increased the provisional price of RLNG for consumers of both gas companies and jacked up the rates for consumers of Sui Northern Gas Pipelines Limited (SNGPL) by $0.692 per mmbtu or 5.36% while for the consumers of Sui Southern Gas Company (SSGC) it has been increased by $0.707 per mmbtu or 5.59%.
Later in the day, while terming the report of high purchase price of LNG by PSO, the Ministry of Energy said that PSO has refuted the purchase of $20.055 per unit LNG, as it has not awarded any such tender and it was already scrapped on July 27.
The Ogra spokesman said, “As per routine monthly practice, estimated prices of RLNG are computed based on available data at the time of computation. Since the prices are for the month in advance, many pricing components are calculated for determination of prices on a provisional basis based on available data at that time, which is later actualised by Ogra based on actual costs incurred.”
“However as informed by PSO that they have scrapped the cargo with offered price of 27.87% of Brent, RLNG price notified on August 2 is no longer valid and August RLNG price notification is being withdrawn,” the spokesman added.
Published in The Express Tribune, August 4th, 2021.
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