RLNG December prices cut for SSGC, SNGPL consumers

ISLAMABAD: Government on Friday cut prices of re-gasified liquefied natural gas (RLNG) by one percent month-on-month for December following an increase in the previous month with steady international oil prices expected to give a brief pause to escalating cost of energy.

The government notified reduction in the prices of RLNG for December by 1.05 percent for Sui Southern Gas Company (SSGC) and 1.015 percent for Sui Northern Gas Company (SSGC) over the previous month.

The Oil and Gas Regulatory Authority (OGRA) set RLNG prices at $10.8349/million metric British thermal unit (mmbtu) for the consumers of SNGPL and $10.8234/mmbtu for SSGC. In November, the RLNG price for SNGPL was $10.946/mmbtu and it was $10.9385/mmbtu for SSGC. In October, RLNG price for SNGPL was $10.723/mmbtu and it was $10.7105/mmbtu for SSGC.

In absolute terms, the RLNG latest price has been reduced by $0.111/mmbtu for SNGP and 0.115/mmbtu for SSGC.

“In accordance with the federal government decision regarding RLNG allocation, pricing and associated matters and advice from the ministry of energy regarding weighted average sale price dated January 22, 2018, RLNG weighted average sale prices for the month of December 2019 has been computed,” OGRA said in a statement.

LNG is an imported product and its prices are pegged with the international oil rates. The product’s price increases as oil prices go up in the international market.

Reduction in RLNG prices would help in bringing power generation cost down as the imported gas is the second biggest source of power generation after hydropower. LNG saved the country from massive energy crisis that hit the country a decade ago. Currently, imported gas is meeting more than one-fourth of the country’s energy demand.

Production of indigenous gas stands at four billion cubic feet per day (bcfd) against the total demand of six bcfd. The country is currently importing LNG equivalent to 1.2 bcfd to meet the local requirements. There are currently two re-gasified liquefied natural gas terminals operating in the country.

The cabinet recently approved five consortiums to set up LNG terminals in the country with growing need of gas. The new notified prices of RLNG also include charges of the LNG terminals, transmission losses, port charges, and margins of the importers – Pakistan State Oil and Pakistan LNG Limited. These new weighted average sale prices of RLNG have been computed, based on nine cargoes imported for the month including six cargoes by Pakistan State Oil and three by Pakistan LNG Limited.