Business

Govt hikes RLNG tariff for Sui gas companies

Published

12 months ago

Farwa

Increase attributed to rise in RLNG Brent prices.
Ogra reduced RLNG prices seven times since January.
Pakistan relies on LNG to meet nearly one-third of its demands.

ISLAMABAD: The government has approved a hike of up to half a dollar per MMBTU or 3.8% in the prices of re-gasified liquefied natural gas (RLNG) for both the Sui gas companies for October 2023, The News reported on Tuesday.

The Oil and Gas Regulatory Authority (Ogra) has released a notification announcing that the price of RLNG for consumers of Sui Northern Gas Pipelines Limited (SNGPL) has increased by $0.496 per MMBTU (3.87%) from the previous month. Similarly, the cost of RLNG for consumers of Sui Southern Gas Company (SSGC) has increased by $0.508 per MMBTU (3.8%) compared to September prices.

The spokesperson for Ogra said, “In accordance with the policy guidelines of the federal government, Ogra has determined the RLNG prices for Sui Gas companies, effective from October 1, 2023,” adding that the increase in RLNG prices is attributed to the rise in RLNG Brent prices in the international market. It announced the provisional prices for the RLNG sale for October.

The weighted average sale price for Sui Northern Gas Pipelines Limited (SNGPL) consumers has been set at $13.3332 per Million Metric British Thermal Units (MMBTU), while Sui Southern Gas Company (SSGC) consumers will be charged $13.8716 per MMBTU.

In September, the RLNG prices set by OGRA were $12.8366 per MMBTU for SNGPL consumers and $13.3636 per MMBTU for SSGC consumers.

The fluctuation in RLNG prices was notable throughout the year. Ogra reduced RLNG prices seven times since January, with two increases recorded in May, September, and now in October. The price started declining in January, with a reduction of up to 2.2%. This was followed by further decrease of 4.3% in February, 3.16% in March, and 0.47% in April. It was increased by 1.3% in May 2023 but then decreased again in June (2.55%), July (1.5%), and August (1.3%). In September, there was an increase of 3.08% in the RLNG price.

The recently revised prices for RLNG include several elements, such as charges for LNG terminals, transmission losses, port charges, and margins for state-owned importers, namely Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL).

They were determined based on the import of eight cargoes by PSO and one cargo by PLL.

In a noteworthy development, the Asian Platts JKM (Japan Korea Marker) LNG price rose to $18.585 per mmBtu on October 23, 2023, marking a 24% increase from the previous month when it was $14.99 per mmBtu on September 25, 2023. Likewise, since August 25, 2022, (when the LNG price peaked at $69.955/mmBtu), its price has reduced by $51.37/mmBtu or 73.4%. JKM is the LNG benchmark price assessment for the spot physical cargoes.

Pakistan relies on LNG imports to meet nearly one-third of its energy demands. However, when comparing the RLNG prices in October 2023 with those of October 2022, the cost for SNGPL consumers decreased by only 9.8%, while SSGC clients experienced an 8.65% reduction over the year.

Business

Gold prices in Pakistan approach an all-time high.

Published

20 hours ago

Farwa

Following a substantial surge the prior day, gold prices in Pakistan are ascending to unprecedented levels with an additional gain on Thursday, coinciding with a rise in global precious metal rates.

The price of 24-karat gold in the local market rose by Rs700 per tola, reaching Rs277,900, as reported by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Likewise, the cost of 10 grams of 24-karat gold increased by Rs600, currently priced at Rs238,254.

Globally, gold prices exhibited an upward trend, increasing by $7 throughout the day. The APGJSA reports that the international gold price was $2,682 per ounce.

Notwithstanding the increase in gold prices, the silver market exhibited stability, with the price of silver maintained at Rs3,050 per tola.

In the previous month, gold prices in Pakistan reached an unprecedented high of Rs 277,000 a tola, driven by substantial gains in the worldwide market.

Business

World Bank: Power industry subsidies soar by 400% in just five years.

Published

20 hours ago

Farwa

Ninety-four percent of domestic customers will benefit from the budgetary subsidy in 2024, according to a World Bank report, which credits the increase in protected consumers with contributing to the weight of subsidies.

In the current fiscal year, the electricity sector subsidy has increased by an astounding Rs. 954 billion, from Rs. 236 billion in the 2020 fiscal year to Rs. 1190 billion.

Notwithstanding changes, the circular debt has averaged Rs. 400 billion yearly over the last four years due to the incapacity to minimize losses and inadequate recovery of electricity payments.

According to the World Bank, the government must solve the fundamental problems in the power industry in order to lower the burden of subsidies and circular debt, as rising electricity prices and inadequate tax collection will only serve to worsen the circular debt crisis.

The rise in Pakistan’s power sector circular debt has raised worries from the World Bank (WB) despite an unprecedented increase in energy pricing.

Within the last six years, the debt has grown by 1241 billion rupees, according to the World Bank’s study. Between 2019 and 2021, the debt climbed by 1128 billion rupees.

The electricity sector’s circular debt has been increasing at an alarming rate, according to a World Bank analysis. Between 2022 and 2024, there was a substantial increase of 113 billion rupees.

Pakistan’s electricity industry has 2393 billion rupees in total circular debt as of 2024.

Restructuring is required to solve the circular debt issue, according to the World Bank.

Business

Final settlement: Govt to pay five IPPs Rs 72 billion.

Published

21 hours ago

Farwa

On October 10, Prime Minister (PM) Shehbaz Sharif declared that the agreements with five IPPS would be terminated in the first phase. Sources claim that the government will give Rs 15.5 billion to Rousch Power and Rs 36.5 billion to Hubco.

In a same vein, the federal government would pay Lalpir Power Rs 12.8 billion, Atlas Power Rs 15.5 billion, and Sapphire Power Rs 6 billion.

The sources state that late payment fees are not included in the settlement. With effect from October 1, the agreements with the five IPPs will be considered officially ended.

PM Shehbaz earlier remarked that the termination was carried out with the owners of the IPPs’ mutual permission while presiding over the federal cabinet meeting in Islamabad.

The Prime Minister notified the Cabinet that the only money that will be paid, interest-free, to these IPPs is the outstanding balance.

According to him, the national exchequer will gain over 411 billion rupees from the termination of these contracts, while power customers will save roughly sixty billion rupees.

According to Prime Minister Shehbaz Sharif, it was the result of the arduous teamwork of the entire government. In this regard, he also acknowledged the contributions and assistance of the associated parties. He specifically mentioned General Asim Munir, the Chief of Army Staff, who showed a personal interest in the situation.

The prime minister characterized the development as the start of a trip that will ultimately lead to the advancement and prosperity of the populace.

PM Shehbaz Sharif also brought up the assistance that the Punjabi and Federal governments gave to power users over the summer.