The government has announced a reduction in the average monthly sale price of re-gasified liquefied natural gas (RLNG) by up to $0.1938 or 1.5 percent for July 2023. This decision was made public on Tuesday by the Oil and Gas Regulatory Authority (OGRA), which is responsible for setting the preliminary pricing of RLNG.
The new rates have been set at $12.6493/mmBtu for customers of Sui Northern Gas Pipelines Limited (SNGPL) and $13.1367/mmBtu for customers of Sui Southern Gas Company (SSGC). This marks a 1.5 percent decrease from the previous rate, continuing the trend of rate cuts that have been implemented in the preceding months.
While this reduction is expected to have a minor impact on the cost of electricity generation, particularly for RLNG-based power plants, it is important to note that the federal government has already decided to increase electricity rates from the current billing cycle.
This price cut is part of a broader trend, as the federal government has been consistently reducing RLNG costs for domestic customers since May of the previous year, with only a few exceptions.
However, it’s worth noting that RLNG prices in the domestic market reached their peak in May 2022, with rates standing at $21.8317/MMBtu for SNGPL customers and $23.7873/MMBtu for SSGC customers. This was the highest rate since Pakistan began importing LNG in 2015.
The newly announced rates are likely to include fees for LNG terminals, port costs, and the margins of state-run importers such as Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL).
