ISLAMABAD: With massive system losses of 14.5 per cent, the Oil and Gas Regulatory Authority (Ogra) on Wednesday notified up to 2.75pc increase in the sale price of Regasified Liquified Natural Gas (RLNG) for two Sui gas companies — SSGCL and SNGPL — for the current month with effect from March 1 owing to higher international prices.

This is the first price increase after a gap of two consecutive monthly price cuts — 9pc in February and 8pc in January.

The RLNG’s sale price for Lahore-based Sui Northern Gas Pipelines Ltd (SNGPL) has been raised by 2.75pc to $11.86 per mmBtu for March against $11.55 in February, $12.65 in January and $13.68 in December. The sale price at the distribution stage for SNGPL was slashed by 2.58pc to $12.814 per mmBtu for March from $12.49 per unit in February, $13.67 in January and $14.8 in December.

Likewise, the RLNG sale price for Karachi-based Sui Southern Gas Company Ltd (SSGCL) has been increased at the transmission stage by 0.8pc to $11.215 mmBtu against $11.126 in February. This is still on the lower side as the transmission stage rate for the company stood at $13.264 per unit in December. The sale price at the distribution stage for the company was increased by 0.76pc to $13.056 per mmBtu for March against $12.96 in February, $14.245 in January and $15.45 per unit in December 2023.

The overall increase in absolute terms for SSGC’s transmission price amounted to $0.89 per mmBtu and $0.98 per unit at the distribution point. The reduction in RLNG price for SNGPL at transmission stood at $0.317 per mmBtu and $0.322 per unit for distribution.

The major reason behind lower RLNG prices for SNGPL despite its larger distribution network and greater distance from ports when compared to SSGCL, according to Ogra’s tariff sheet, is the significantly higher system losses of the SSGCL. Ogra said the SSGCL’s transmission and distribution system losses, commonly described as unaccounted for gas (UFG), stood at 14.48pc compared to 8.61pc of the SNGPL’s network.

This included SSGCL’s distribution loss at 14.36pc and transmission loss at 0.12pc while SNGPL’s distribution losses stood at 8.23pc besides 0.38pc of transmission losses.

Ironically, the RLNG distribution prices for SSGCL $13.056 per mmBtu and $12.81 per mmBtu for SNGPL are almost $3.36 and $3.13pc per mmBtu higher than Pakistan State Oil’s $9.46 per mmBtu average delivered price ex-ship (DES), respectively. This is mainly because both the LNG importers — PSO and Pakistan LNG Ltd (PLL) — also charge profit margins on account of retainage and margins at the rate of 3.15pc and 3.1pc of DES price, respectively, on top of 8.6pc losses of SNGPL and14.5pc losses of SSGCL.

The basket RLNG price was based on a total of 10 cargoes for March and remained unchanged in February against 12 in January and 11 in December. These included 9 cargoes under the two LNG contracts with Qatar at an average of $9.49 per mmBtu — five cargoes at $10.61 and four cargoes at $8.1 per mmBtu.

Published in Dawn, March 21st, 2024