ISLAMABAD-The government on Tuesday slashed the average sale price of Re-gasified Liquefied Natural Gas (RLNG) by upto 3.16 percent for the consumers of both the state owned Sui companies for March 2023.
A notification issued by Oil and Gas Regulatory Authority (OGRA) said that the RLNG price for the Sui Northern Gas Pipeline Limited (SNGPL) consumers has been slashed by $0.41/MMBtu or 2.99 percent, while for Sui Southern Gas Company (SSGC) it has been reduced by $0.442/MMBtu or 3.17 percent over the month of February 2023. The Oil and Gas Regulatory Authority (OGRA) issued its determined RLNG weighted average sale provisional price notice on Tuesday. The regulator has set RLNG prices at $13.294/MMBtu and $13.51/MMBtu for the consumers of SNGPL and SSGC, respectively. The newly notified prices of RLNG also include charges of the LNG terminals, transmission losses, port charges, and margins of the state-run importers Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). These new weighted average sale prices of RLNG have been computed based on nine cargoes imported by PSO, while PLL imported one cargo of this super-chilled gas. Under two long-term contracts with Qatar, PSO is procuring LNG at 13.37 percent of Brent and 10.20 percent of Brent, respectively. Five cargos were procured at a slope of 13.37 percent of Brent while three at 10.2 percent.
For the last eight months, PLL has procured one cargo per month, except for February when it made no procurement. The price of LNG is pegged to the international crude rates. Currently, the crude oil prices in international market are hovering around $72 per barrel coming down from over $85 per barrel in December last year. Besides, decline in crude oil prices, RLNG prices can be influenced by various other factors, such as cold weather which greatly disturbs the demand and supply chain, transportation costs, and geopolitical events. The LNG prices for March were lower for SNGPL and higher for SSGC in comparison with the prices in the same month of last year. Last year in March 2022, the RLNG price was $15.813/MMBtu for SNGPL and $17.115/MMBtu for SSGC consumers. In May 2022, the RLNG price in the local market had touched its peak of $21.8317/MMBtu for SNGPL and $23.7873/MMBtu for SSGC, since Pakistan started importing LNG in 2015. However, since May 2022, there is downward trend in the RLNG prices for the SNGPL and SSGC consumers.