Ogra notifies up to 15.3pc increase in RLNG prices

Consumers will face higher regasified liquefied natural gas (RLNG) prices for October, with the rates at the distribution stage rising by up to 15.3 per cent, according to a notification issued by the Oil and Gas Regulatory Authority (Ogra) on Friday.

The revised rates have widened the difference between the cost of imported LNG and the price at which it is supplied to consumers. While the average delivered ex-ship price of LNG stood at $10.75 per million British thermal units (mmBtu) in October, the distribution-stage rates reached $16.396 per mmBtu for Sui Southern Gas Company Limited (SSGCL) and $17.33 for Sui Northern Gas Pipelines Limited (SNGPL).

The gap reflects additional charges across the supply chain, including margins and retainage claimed by LNG importers Pakistan State Oil (PSO) and Pakistan LNG Limited, as well as port authorities. These charges amount to 3.77 per cent of the delivered ex-ship price. Distribution losses further add to the cost, standing at 12.55pc for SSGCL and 8.97pc for SNGPL.

The October increase follows a 20pc reduction in RLNG prices for September and is largely attributed to higher crude oil prices.

Under the latest revision, SNGPL's distribution-stage rate has risen by 14pc to $17.33 per mmBtu from $15.196 in September. Its transmission-stage price increased by 13.9pc to $15.94 per mmBtu from $13.99.

SSGCL's distribution rate has gone up by 15.27pc to $16.396 per mmBtu from $14.22 in the preceding month. At the transmission stage, its price increased by 15.25pc to $14.53 per mmBtu from $12.611.

The higher import price is also expected to affect the cost of electricity generated from RLNG in December. Power generation using the fuel cost around Rs40 per unit in September, when the average imported LNG price was $10.06 per mmBtu. The corresponding price rose to $10.75 per mmBtu in October.

The average delivered ex-ship price of the two LNG cargoes imported in October was higher than the $10.06 recorded in September, but remained below the $12.12 in August and $18.96 in July.

SSGCL supplies gas to Sindh and Balochistan, while SNGPL serves consumers in Punjab and Khyber Pakhtunkhwa. Both companies have reported higher distribution losses than a year earlier. SSGCL's losses have increased to 12.55pc from around 10.6pc, while those of SNGPL have reached nearly 9pc from 7.47pc in October last year.

The October basket price was calculated using two cargoes imported from Qatar under separate long-term agreements linked to 13.37pc and 10.20pc of Brent prices.

PSO has a long-term contract to import up to 11 cargoes every month. However, some of its supplies were routinely diverted to the spot market even before the latest crisis in the Middle East.

Qatar subsequently declared force majeure following the US attack on Iran, the closure of the Strait of Hormuz and the suspension of gas operations at the field.