RLNG price increased by over $0.7 per mmbtu

ISLAMABAD: The government on Monday increased the prices of regasified liquefied natural gas (RLNG) by more than five percent or $0.7 per million metric British thermal unit (mmbtu) for August 2021.

For Sui Northern Gas Pipelines Limited (SNGPL) consumers, the price has been increased by 5.36 percent while for Sui Southern Gas Company (SSGC) consumers, the product has been made dearer by 5.59 per cent.

The Oil and Gas Regulatory Authority (Ogra) notified the new RLNG prices at $13.608/mmbtu for SNGPL and $13.3454 per mmbtu for SSGC consumers. In absolute terms, the RLNG price was increased by 0.7068/mmbtu for SSGC and $0.692/mmbtu for SNGPL.

During the month of July, the RLNG price was $12.916/mmbtu for SNGPL and $12.6386/mmbtu for SSGCL. LNG is an imported product and remains pegged with the international oil prices. With the movement of oil price in the international market, the local RLNG price is also changed. Owing to increasing prices of crude and other petroleum products in the international market, the government increased the prices. The new prices of RLNG include charges of LNG terminals, transmission losses, port charges and margins of the importers – Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL).

The new weighted average sale prices of RLNG have been computed based on the 12 cargoes imported in the month including six each by PSO and PLL. The increase in RLNG prices would make the power generation costlier 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.

The production of indigenous gas stands at four billion cubic feet per day (bcfd) against the total demand of six to seven 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 government has also approved five consortiums to set up LNG terminals in the country with growing need of gas.