RLNG gets costlier by 3.8pc

Published October 25, 2023
The import of eight LNG cargoes by PSO and one by PLL have influenced RLNG prices in October.—Reuters/file
The import of eight LNG cargoes by PSO and one by PLL have influenced RLNG prices in October.—Reuters/file

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has notified that the average sale price of re-gasified liquefied natural gas (RLNG) for October experienced an increase of over 3.8 per cent from the preceding month for Sui companies.

The RLNG price increased by $0.4966 per million British thermal units (mmBtu) or 3.87pc for consumers of Sui Northern Gas Pipeline Ltd (SNGPL), while the price surged by $0.5081 per mmBtu, or 3.8pc, for Sui Southern Gas Company (SSGC) consumers compared to September.

RLNG prices have seen a third hike this year, largely due to fluctuations in the global market. In September, prices rose by 2.79pc for SNGPL and 3.08pc for SSGC. Earlier, in May, both Sui companies also experienced a price increase of 1.3pc.

This surge follows closely on the heels of the government’s announcement of a substantial hike in natural gas prices for domestic users.

Over the first seven months of this year, a consistent downward trend has been observed. The figures reveal a series of monthly declines when compared to their respective preceding months.

January saw a drop of 2.2pc, followed by a more significant decrease of 4.3pc in February. March continued the trend with a 3.16pc fall, while April experienced a slight dip of 0.47pc. After an increase in May, June recorded a 2.55pc decline. The downward trajectory persisted with July and August registering reductions of 1.5pc and 1.3pc, respectively.

According to Ogra’s statement, SNGPL consumers witnessed a rise in the RLNG weighted average sale price, which was pegged at $13.3332 per mmBtu in October, up from $12.8366 per mmBtu in September, indicating a month-on-month increase of 3.87pc.

For SSGC, the RLNG weighted average sale price experienced a hike in October, reaching $13.8716 per mmBtu from September’s $13.3636 per mmBtu. This adjustment reflects a month-on-month growth of 3.80pc.

The regulatory authority has attributed the surge in RLNG prices to the escalating RLNG Brent prices in the global market. It further said that Ogra determined RLNG price under the policy guidelines of the federal government for Sui companies.

The prices of RLNG are not immune to change. The international market, with its own set of fluctuations, plays a significant role. Currency exchange rates, too, hold sway over RLNG prices.

The cost structure of RLNG also encompasses charges for LNG terminals and transmission losses, as well as port charges. Additionally, the margins for state-run importers — Pakistan State Oil (PSO) and Pakistan LNG Ltd (PLL) — are also factored in

Published in Dawn, October 25th, 2023

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