Pakistan: ECC approves RLNG price increase

Pakistan’s Economic Coordination Committee (ECC) on Tuesday reviewed the pricing mechanism for regasified LNG, approving a US$1.2 per unit price raise, previously rejected by the Oil and gas Regulatory Authority.

In its statement, the ECC said it had approved the recommendations made by a committee constituted under its directive and gave consent to formally convey the recommendations to OGRA.

A government official was quoted by Pakistan’s Dawn as saying that OGRA initially allowed a 66 cents per million British thermal units (mmBtu) terminal charges for LNG, however, the ministry of petroleum signed an agreement with the Engro Terminal for a 66 cents charge over a period of 20 years.

This resulted in Engro billing a tariff of $1.45 per unit in the first few years due to lower volumes.

According to the report, the terminal charge billed by Engro will be charged to consumers of regasified LNG. ECC additionally, instructed OGRA to allow actual system losses, at an average of 11 percent, for calculation of RLNG price.

ECC also directed OGRA to allow a $0.025 mmBtu charge of LNG price to Sui Southern Gas Company for its LNG supply agreement, and also instructed Ogra to allow an infrastructure cess in the RLNG price until a decision with a provincial government is reached, the report shows.

The report further states that, at the ECC meeting, a consensus was reached that port charges would be taken at actual and that all relevant costs can be allowed to the Port Qasim Authority to sustain its operation along with a reasonable profit margin.

LNG World News Staff