The Oil and Gas Regulatory Authority pushed up regasified liquefied natural gas rates by as much as 15.3% for October, lifting expenses for fuel supplied by both Sui utility firms following a 20% price cut in September driven primarily by rising global crude oil values.

This upward adjustment will likely impact power generation expenses in December, given that RLNG-based electricity production cost Rs40 per unit in September when average LNG import rates reached $10.06 per million British thermal units before climbing to $10.75 per mmBtu in October.

Average delivered ex-ship figures for LNG across two shipments rose to $10.75 per mmBtu in October, contrasted with $10.06 in September, $12.12 in August, and $18.96 in July.

SNGPL and SSGCL Face Higher RLNG Rates

Based on official notices from the regulatory body, the sale rate for Sui Northern Gas Pipelines Limited climbed 13.9% at the transmission phase to hit $15.94 per mmBtu for October, compared to $13.99 the month before.

Distribution level pricing for the same firm went up 14% to reach $17.33 per mmBtu from $15.196 per mmBtu.

In a similar fashion, transmission rates for Sui Southern Gas Company Limited moved up 15.25% to $14.53 per mmBtu from $12.611 per mmBtu in September.

Distribution pricing for this provider also jumped 15.27% to land at $16.396 per mmBtu against $14.22 in the prior month.

Sui Southern Gas Company Limited provides service to users located in Sindh and Balochistan, with distribution losses currently sitting at 12.55% versus roughly 10.6% during the prior year.

Conversely, Sui Northern Gas Pipelines Limited operates in Punjab and Khyber Pakhtunkhwa, noting distribution losses close to 9% compared to 7.47% in October of last year.

Distribution Costs Push RLNG Prices Higher

The gap between incoming LNG import expenses and fees billed to buyers points to extra expenses arising throughout the supply chain network.

Even though the average delivered LNG rate was $10.75 per mmBtu during October, distribution stage figures hit $16.396 for Sui Southern Gas Company Limited and $17.33 for Sui Northern Gas Pipelines Limited, exceeding average import expenses by $5.65 and $6.58 respectively.

Extra expenses cover fees and profit margins gathered by state-owned corporations participating in LNG procurement and delivery, where Pakistan State Oil, Pakistan LNG Limited, and port operators collect retainage and service margins totaling 3.77% of the delivered ex-ship value.

Such expenses stack on top of distribution network losses measured at 8.97% for Sui Northern Gas Pipelines Limited and 12.55% for Sui Southern Gas Company Limited.