The government has reduced the price of Re-Gasified Liquefied Natural Gas (RLNG) from June 2020 by 18.4% for Sui Northern Gas Pipelines Limited (SNGPL) and 19.1% for Sui Southern Gas Company (SSGC) as compared with the previous month following a sharp decline in international crude oil price.
Oil and Gas Regulatory Authority (Ogra) fixed the average RLNG prices at $6.12 per MMBtu for Sui Northern Gas Pipeline Limited (SNGPL) and $6.27 per MMBtu for Sui Southern Gas Company Limited (SSGCL) for the month of June.
According to the document issued OGRA, a reduction in weightage average sale price of RLNG excluding GST of $1.38 per MMBtu for consumers of SNGPL and $1.48 MMBtu for SSGCL was seen as compared with May’s provisional prices of RLNG.
After this announcement, CNG stations in Punjab and Islamabad regions using RLNG also reduced the prices by Rs 7.5 per liter. The new CNG price will be Rs 64.4 per liter for June which was Rs 72.3 per liter in May.
The price is calculated on the basis of Pakistan State Oil (PSO) six cargo at 13.37% to Brent from Qatar and 11.6 to 11.9% to Brent by Pakistan LNG Limited at the spot rate.
It is worth mentioning that RLNG is a major contributor to power generation after hydel sources, so with the decline of the RLNG prices, the cost of energy will also reduce and the benefit is likely to be passed on to power consumers.
The reduction in imported gas prices will have a very positive impact on reducing inflationary pressure in the economy with benefits to the domestic and industrial sectors as well.