In a welcome move for consumers, the federal government has announced a significant reduction in the price of re-gasified liquefied natural gas (RLNG) for the month of December. The cut, notified by the Oil and Gas Regulatory Authority (OGRA), provides relief to domestic and commercial consumers served by both of the country's major gas utilities.
OGRA Announces Price Reduction Details
The regulatory authority issued its monthly notification, detailing a price decrease of up to 5.9 percent compared to the rates charged in November. Specifically, consumers of Sui Northern Gas Pipelines Limited (SNGPL) will see their RLNG prices fall by 4.6 percent. Meanwhile, consumers under the Sui Southern Gas Company Limited (SSGC) network will benefit from a larger reduction of 5.9 percent.
Breakdown of New Rates for SNGPL Consumers
For SNGPL customers, the transmission price has been lowered by $0.5119 per million British thermal units (MMBtu), which translates to a 4.48 percent decrease. The new transmission rate is set at $10.9186 per MMBtu, down from $11.4305 in November. Furthermore, the distribution rate has been reduced by $0.5716 per MMBtu (4.6%), settling at $11.828 per MMBtu compared to the previous month's $12.3996.
Revised Pricing for SSGC Network
Similarly, consumers in the SSGC region will experience a sharper decline. The transmission price for December is $9.474 per MMBtu, marking a drop of $0.591 (5.87%) from November's $10.065. The distribution rate has been cut by $0.675 per MMBtu (5.9%), bringing it down to $10.7767 per MMBtu from $11.45 last month.
Reasons Behind the Price Adjustment
OGRA clarified that the decrease in RLNG prices is directly attributed to a fall in the Delivered Ex-Ship (DES) price in the international market. The updated consumer prices incorporate various charges, including:
- Terminal charges
- Transmission losses
- Port handling costs
- Margins for the state-run importer, Pakistan State Oil (PSO)
The weighted average sale price is calculated based on 10 LNG cargoes imported by PSO under its two long-term contracts with Qatar. Of these ten shipments, six were priced at a higher slope and four at a lower rate. PSO procured six cargoes at 13.37 percent of Brent crude prices and the remaining four at 10.20 percent of Brent.
This price reduction offers financial respite to a wide range of consumers and reflects the impact of fluctuating global energy markets on local utility costs.
