Govt increases RLNG prices for Sui companies
Since July 2015, Ogra has been determining the price of RLNG for sale by SNGPL and SSGC to their consumers. photo: file
The government, on Tuesday, announced an increase in the prices of re-gasified liquefied natural gas (RLNG) for both the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) for the month of September. The Oil and Gas Regulatory Authority (OGRA) issued a notification stating that RLNG prices for SNGPL consumers have been raised by $0.3481 per mmbtu (2.79%), while for SSGC consumers, prices have increased by $0.3987 per mmbtu (3.08%) compared to August.
These price adjustments are in accordance with the Policy Guidelines of the federal government and will be effective from September 1st, 2023, according to an OGRA spokesperson. The increase in RLNG prices is primarily attributed to rising RLNG Brent prices in the international market. However, the depreciation of the Pakistani rupee has also played a role in the price hike.
According to a statement released by OGRA, for SNGPL consumers, the RLNG weighted average sale provisional price has been set at $12.8366 per mmbtu, while SSGC consumers will pay $13.3636 per mmbtu for RLNG in September. In August, OGRA had determined RLNG prices at $12.4885 per mmbtu for SNGPL consumers and $12.9649 per mmbtu for SSGC consumers.
This price adjustment marks the second increase in RLNG prices this year, with the previous seven decreases taking place in January of 2.2%, February of 4.3%, March of 3.16%, April of 0.47%, June of 2.55%, July of 1.5%, and 1.3% in August. In May the price was increased by 1.3% before it was reduced again in June. The fluctuation in RLNG prices is influenced by various factors, including changes in the international market, currency exchange rates, and components such as charges for LNG terminals, transmission losses, port charges, and margins for state-run importers, namely Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). These prices were determined based on the eight cargoes being imported by PSO and one by PLL.
PSO procures LNG under two long-term contracts with Qatar, with pricing mechanisms set at 13.37% and 10.20% of Brent crude oil prices, respectively. It is important to note that RLNG prices are closely tied to global crude oil prices, as LNG pricing mechanisms are often based on a percentage of Brent crude oil prices. Therefore, fluctuations in crude oil prices can impact RLNG prices in Pakistan, said the statement.
Published in The Express Tribune, September 13th, 2023.
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