OGRA Announces a Significant Increase in RLNG Price Increase

May 29, 2024Zayn0

The new rates for re-gasified liquefied natural gas (RLNG) for Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), which go into effect on May 1, 2024, have been announced by the Oil and Gas Regulatory Authority (OGRA).

SNGPL RLNG Rates 

The distribution price for SNGPL has been established at $13.744 per MMBtu for May 2024, while the RLNG transmission price has been set at $12.721 per MMBtu. These costs have gone up by 4.2% and 6.18%, respectively, since April 2024.

SSGCL RLNG Costs 

Regarding SSGC, the distribution price is $14.0506 per MMBtu, while the RLNG transmission rate is $12.0672 per MMBtu. The prices for distribution and transmission have increased by 6.5% and 6.5%, respectively, from the previous month.

The Reasons for the Price Increase 

There are several reasons for the notable rise in RLNG pricing, including:

Dynamics of the Global Energy Market 

Global supply chain disruptions and geopolitical conflicts have contributed to the continuous volatility of the energy market, which has caused natural gas and other energy commodities to rise in price.

Changes in Currency 

The landed cost of RLNG imports, which are primarily denominated in US dollars, has grown due to the Pakistani Rupee’s ongoing decline against major international currencies like the US dollar.

A Rise in Demand 

The supply-demand balance has been further strained by the rising demand for natural gas, especially in the hot summer months. As a result, prices have increased.

Effects on Businesses and Consumers 

End users will be directly impacted by the higher RLNG prices because natural gas is an essential energy source for both residential and commercial use. Businesses that depend on natural gas are expected to see increased production expenses and utility bills because of this price increase, which may reduce their ability to compete globally.

Conclusion

Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) will see a significant increase in re-gasified liquefied natural gas (RLNG) pricing, as revealed by the Oil and Gas Regulatory Authority (OGRA), starting on May 1, 2024. OGRA must strike a balance between the interests of different stakeholders and advance the nation’s transition to a more sustainable energy mix.

 

Zayn

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