ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has announced an around 15% increase in Regasified Liquefied Natural Gas (RLNG) prices for June at the distribution stage for both Sui gas utilities, citing expensive spot market purchases made to offset supply disruptions triggered by the recent U.S.-Iran conflict.
The latest notification takes RLNG prices to their highest level in months, with rates now 15% higher than in May, nearly 56% above March levels, and 73% higher than in February. The sharp increase has significantly raised fuel costs for power generation, with RLNG-based electricity generation costing approximately Rs31 per unit in May, compared with Rs13.72 per unit in April.
At the transmission stage, Sui Northern Gas Pipelines Limited (SNGPL) increased its RLNG sale price by 14.85% to $17.94 per million British thermal units (mmBtu) from $15.62 per mmBtu in May. The distribution-stage price also rose by 14.94% to $19.52 per mmBtu, up from $16.98 per mmBtu last month.
Similarly, Sui Southern Gas Company Limited (SSGCL) raised its transmission-stage RLNG price by 16% to $16.37 per mmBtu, while the distribution-stage price climbed 16.17% to $18.64 per mmBtu, compared with $16.04 per mmBtu in May.
OGRA attributed the higher prices primarily to costly LNG procured from the international spot market after supply disruptions caused by the temporary closure of the Strait of Hormuz and interruptions in gas production during the U.S.-Iran conflict.
The regulator noted that end-user RLNG prices remain substantially higher than the average delivered LNG cost due to additional charges across the supply chain. Distribution prices exceed the average delivered ex-ship (DES) cost by approximately $3.3 per mmBtu for SSGCL and $4.2 per mmBtu for SNGPL, reflecting importer margins, port handling charges, retainage costs, and system losses.
Distribution losses have also increased, with SSGCL’s losses reaching 12.55% in Sindh and Balochistan, while SNGPL’s losses stand at nearly 9% in Punjab and Khyber Pakhtunkhwa.
The June RLNG pricing is based on four LNG cargoes, including three long-term supplies from QatarGas imported by Pakistan State Oil (PSO) at an average cost of $13.14 per mmBtu, significantly higher than $9.20 per mmBtu recorded in May. The fourth cargo was imported by Pakistan LNG Limited (PLL) from the spot market at $19.13 per mmBtu.
Pakistan’s regular LNG supplies from Qatar were disrupted after transportation through the Strait of Hormuz was affected, prompting the government to reactivate PLL, which had remained largely inactive for over two years, to procure emergency LNG cargoes from the spot market.
According to OGRA, of the 3.2 million mmBtu imported by PLL in June, 2.4 million mmBtu will be supplied to K-Electric, while the remaining 0.8 million mmBtu will be allocated to SNGPL to help meet domestic gas demand and support electricity generation.
Story by Khaleeq Kiani
