Govt cuts RLNG prices by 1.3 percent forAugust as international gas prices decline

ISLAMABAD: The government on Wednesday cut re-gasified liquefied natural gas (RLNG) prices for both Sui companies on Wednesday, following a drop in international super-cool gas prices.

Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) will charge up to 1.3 percent less for RLNG in August, equivalent to $0.161 per million British thermal units (MMBtu).

The new prices are based on the weighted average of the RLNG imports by Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) in July.

For SNGPL consumers, the RLNG price has been lowered by $0.1608 per MMBtu, reflecting a decrease of 1.27 percent from the previous month (July 2023). Similarly, SSGC clients will see a reduction of $0.1473 per MMBtu, marking a decline of 1.31 percent compared to July.

The adjustment in RLNG prices was communicated through a notification issued by the Oil and Gas Regulatory Authority (OGRA).

According to the notification, the new weighted average sale provisional price for SNGPL consumers is $12.4885 per MMBtu, while SSGC consumers will pay $12.9649 per MMBtu.

In contrast, during July 2023, SNGPL consumers were charged $12.6493/mmBtu for RLNG, and SSGC consumers paid $13.1367/mmBtu.

The price reduction is part of a series of consecutive decreases in RLNG prices implemented by the government over the past seven months. However, an exception was observed in May when RLNG prices were raised by $0.1768 per MMBtu (1.3 percent) for consumers of both Sui companies.

The downward trend in RLNG prices began in January with a decrease of up to 2.2 percent, followed by further reductions of 4.3 percent in February, 3.16 percent in March, and 0.47 percent in April. In May, its price was increased by 1.3 percent, and then it started reducing again in June (by 2.55 percent), July (by 1.5 percent), and now for August (by 1.3 percent).

The newly adjusted RLNG prices encompass various 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 import of nine cargoes by PSO and one cargo by PLL.

It is noteworthy that PSO procures LNG under two long-term contracts with Qatar, with pricing mechanisms set at 13.37 percent and 10.20 percent of Brent crude oil prices, respectively. The closely intertwined relationship between RLNG prices and crude oil prices results in fluctuations in gas prices in line with changes in global crude oil markets.