Pakistan's energy regulator has increased the price of Regasified Liquefied Natural Gas (RLNG) by about 15% for gas distribution companies this month after costly emergency purchases from the international spot market to offset supply disruptions linked to the recent U.S.-Iran conflict.
According to a notification issued by the Oil and Gas Regulatory Authority (OGRA), RLNG prices at the distribution stage rose nearly 15% from the previous month, about 56% above March levels and roughly 73% higher than in February.
The increase follows emergency LNG purchases from the spot market after disruptions to regular supplies caused by the closure of the Strait of Hormuz and the suspension of gas operations during the regional conflict. The higher import costs have significantly increased fuel expenses for electricity generation.
The fuel cost of RLNG-fired power generation rose to PKR 31 per unit in May from PKR 13.72 per unit in April, reflecting the sharp increase in imported fuel costs.
For Sui Northern Gas Pipelines Ltd. (SNGPL), which supplies Punjab and Khyber Pakhtunkhwa, OGRA increased the transmission-stage RLNG price by 14.85% to USD 17.94 per million British thermal units (mmBtu) from USD 15.62 per mmBtu a month earlier. At the distribution stage, the price rose by 14.94% to USD 19.5228 per mmBtu from USD 16.9847 per mmBtu.
For Sui Southern Gas Company Ltd. (SSGCL), which serves Sindh and Balochistan, the transmission-stage RLNG price increased by 16% to USD 16.368 per mmBtu from USD 14.093 per mmBtu in the previous month. The distribution-stage price rose by 16.17% to USD 18.64 per mmBtu from USD 16.042 per mmBtu.
OGRA said the higher end-user prices also reflect distribution losses and supply chain costs. Distribution-stage prices exceed the average delivered LNG cost by about USD 3.3 per mmBtu for SSGCL and USD 4.2 per mmBtu for SNGPL because of importer margins, port charges, retainage costs and network losses.
The regulator said the July pricing was based on four LNG cargoes. Three cargoes imported by Pakistan State Oil (PSO) under long-term contracts with Qatar averaged USD 13.144 per mmBtu, compared with USD 9.2 per mmBtu in May. A fourth cargo imported by Pakistan LNG Ltd. (PLL) from the spot market cost USD 19.134 per mmBtu, compared with USD 18.4 per mmBtu for its May cargo.
Pakistan typically relies on long-term LNG supplies from Qatar, but supply disruptions during the regional conflict forced the government to reactivate PLL, which had remained largely inactive for more than two years, to secure emergency spot cargoes for delivery within 48 to 72 hours.
OGRA said two-thirds of PLL's latest LNG cargo, equivalent to 2.4 million mmBtu, will be supplied to K-Electric, while the remaining 0.8 million mmBtu will be delivered to SNGPL.
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