The Pakistani government cut RLNG (Re-gasified liquefied natural gas) rates by up to 13.1% for October 2022 over the previous month, amid lowering British, Dutch, and Asian wholesale gas prices.
According to the Oil and Gas Regulatory Authority (OGRA), LNG rates for Sui Northern Gas Pipeline Limited (SNGPL) consumers were dropped by 12.92 percent (or $2.1929/MMBtu) over the previous month.
RLNG prices were fixed at $14.785/MMBtu for SNGPL customers and $15.1865/MMBtu for SSGC customers.
Platts JKM (Japan Korea Marker) LNG price has been declining since August 25, 2022, when it peaked at $69.955/MMBtu. On Monday, it closed at $34.779/MMBtu, a drop of $18.59 or 34.8 percent in one month. The gas price is half of its peak. JKM is the LNG spot cargo benchmark price.
The revised rates of RLNG include terminal fees, transmission losses, port fees, and margins of state-run importers Pakistan State Oil and Pakistan LNG Limited. New RLNG weighted average sale prices are based on nine imported cargoes for the month.
In the past four months, the government has cut spot gas purchases. Since August, the government buys one spot shipment each month through Pakistan LNG Limited (PLL).
Under two long-term contracts with Qatar, PSO buys LNG for 13.37% and 10.20% of Brent. PSO bought eight cargoes this month compared to seven previous month, while PLL bought one.
The new costs are lower than previous year’s in the same month. RLNG was $15.7828/MMBtu for SNGPL and $15.528/MMBtu for SSGC in October 2021.
“In compliance with the federal government decision about RLNG allocation, pricing, and related topics and advise from the ministry of energy regarding weighted average selling price dated January 22, 2018, RLNG weighted average sale price for October 2022 has been computed,” OGRA said.
SNGPL’s September RLNG rates were $16.9779/MMBtu while SSGC’s were $17.4762/MMBtu. RLNG prices for SNGPL and SSGC were $16.9496/MMBtu in August 2022.
RLNG is the second largest source of power in the country after hydropower. Its price change influences the cost of generating, which is then passed on to consumers. In May 2022, the government raised RLNG prices by 40% for SNGPL to $21.8317/MMBtu and for SSGC to $23.7873/MMBtu.
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