OGRA cuts RLNG price by $3.05/mmBtu for Dec 2021

December 09, 2021

ISLAMABAD: Oil and Gas Regulatory Authority on Wednesday cut average sale price of re-gasified liquefied natural gas for December up to $3.05 per million British thermal unit .The revised price...

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ISLAMABAD: Oil and Gas Regulatory Authority (OGRA) on Wednesday cut average sale price of re-gasified liquefied natural gas (RLNG) for December up to $3.05 per million British thermal unit (mmBtu).

The revised price would help reduce the cost of power generation from the imported RLNG.

The measure has reduced RLNG prices for SNGPL and SSGC clients, but revised prices are still around 50 percent higher than what were in the corresponding month of last fiscal year. In December 2020, the RLNG price was $8.4466/mmBtu for SNGPL and $8.1633/mmBtu for SSGC clients.

According to the notification for December 2021, the regulator cut the provisional price of RLNG for SNGPL customers by 19.486 percent (or $3.0553/mmBtu) and for SSGC it reduced 19.765 percent or $3.049/mmBtu.

The price of RLNG for SNGPL clients reduced from $15.679/ mmBtu in November to 12.6238/mmBtu in December, and for SSGC consumers, it has been slashed from $15.4259/mmBtu in November to $12.3769 per mmBtu this month.

These new weighted average sale prices have been computed based on the 10 cargoes imported for the month, including eight cargoes by Pakistan State Oil and two by Pakistan LNG Ltd (PLL).

LNG rates are pegged with international oil prices. After a decline in crude prices, the government had to reduce the local sale price of the imported fuel.

In the international market, the oil prices (Global Benchmark Brent) have tumbled from $84.52 per barrel recorded on November 9 to around $75.2 per barrel on Wednesday, showing a decline of around $9.5/barrel in the last one month. The major reason behind the reduction was the emergence of a new variant of Covid-19.

In Pakistan’s power sector, RLNG is the major contributor and source of energy after hydroelectric sources. After the decline, cost of energy will reduce, subsequently cut tariff for power consumers.

According to October 2021 data issues by the National Electric Power Regulatory Authority (NEPRA), power generation from RLNG was 2,703.38 GWh, depicting 23.93 percent share in cumulative generation. The per unit generation cost was Rs16.748/unit. During October, due to high price of RLNG, cost of power generation was at the third place after high-speed diesel generation cost of Rs25.22/unit and residual fuel oil (RFO) based power generation of Rs21.227/unit.

Meanwhile, minister for Energy Hammad Azhar while giving an update on the winter-LNG supply situation said the commodity was still available in abundance for the power sector on merit order.

“Fertilizer plants that are normally shut due to non-supply during winters [are] enjoying uninterrupted supply this year. Export sector [is] getting stable supply,” Azhar said on his twitter handle.

The minister said domestic consumers receiving gas from mostly local gas reserves had been facing pressure problems in winters for the last many years, adding the government has announced the Winter Electricity Discount Package for them [domestic consumers] in order to incentivize them to shift to electrical appliances for heating.



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