ISLAMABAD: The Oil and Gas Regulatory Auth­ority (Ogra) has notified an almost three per cent reduction in the price of re-gasified liquefied natural gas (RLNG) for August as the international spot market remained a ‘no-go area’ for Pakistani importers and the average cost of cargos under long-term contract slightly came down with oil price cut.

According to a notification issued by Ogra on Monday, the average basket price for supply of imported RLNG to two gas companies — SSGC and SNGPL — has dropped by 2.67pc and 2.95pc, respectively. The sale price for SSGCL was notified at $16.95 per million British thermal unit (mmBtu) and that for SNGPL at $15.7mmBtu, respectively.

This was on top of 15-16pc drop in the price to $16 per unit at transmission stage in July from $19.07 and $18.8 per unit for the two gas companies in June. The RLNG price at distribution stage in August dropped by 2.92pc to $16.95 per mmBtu in from $17.46 for SNGPL and by 2.68pc to $17.48 from $17.96 for SSGCL.

The notification showed that a total of six cargos were bought from Qatar — three at 13.37pc of Brent or $14.87 per mmBtu and three at 10.2pc of Brent or $11.35.

Another cargo from a separate long-term contract with Pakistan LNG Ltd was imported at 12.1pc of Brent or $13.5 per mmBtu.

As such, the average RLNG consumer price at distribution stage is down by about $0.5 per mmBtu in August, compared to July for both companies.

It may be noted that LNG’s basket price in May had touched a record $22-24 per mmBtu owing to a string of spot cargos procured by the new coalition government in first month in office to meet energy shortages.

Since then, repeated efforts to import more gas through spot tenders have remained futile owing to tight supply conditions and record prices in the international market following Russia-Ukraine war. As such, all the seven cargos in August and eight in July were available to Pakistan under long-term contracts, mostly with Qatar, except one from another supplier.

Mainly because of expensive spot imports in June, the average LNG-based power generation cost amounted to Rs28.4 per kWh (unit) — the second most expensive source of power generation after furnace oil at Rs36.2 per unit. As a consequence, fuel cost adjustment (FCA) for electricity increased by almost Rs10 per unit in August.

The average sale price for Lahore-based SNGPL had stood at $21.83 per mmBtu in May, up 40pc from $15.616 in April. Likewise, the average RLNG sale price for Karachi-based SSGC had stood at $23.79 per mm­Btu in May against $16.91 in April, showing an increase of about 41pc.

Published in Dawn, August 16th, 2022

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