Pakistan Faces Record-Breaking LNG Price Hike Amid Government Silence

The Pakistan government has faced criticism after Ogra, the regulatory authority, announced a record-breaking 32% increase in regasified liquefied natural gas (RLNG) prices for August. The new price of $25.83 per mmBtu for Sui Northern Gas Pipelines Limited and $25.09 per mmBtu for Sui Southern Gas Company will lead to a retail price of around Rs7,204 per mmBtu.

The increase is the largest in RLNG prices since its introduction in 2015, with prices rising by 148% compared to February's rate of $10.45 (Rs2,916) per mmBtu. The surge in prices will significantly impact fuel costs for power generation and has already resulted in a sharp increase in fuel costs for RLNG-based power generation, reaching Rs31 per unit in May.

Ogra attributed the price hike to five imported LNG cargoes procured from the spot market due to the lack of shipments from Qatar. The regulator also revealed that it had reduced prescribed prices for gas utilities by Rs134 per unit (7.4%), resulting in savings of around Rs50 billion that will be used to adjust circular debt rather than providing relief to consumers through lower gas prices.