ISLAMABAD/LAHORE: The Oil and Gas Regulatory Authority (OGRA) has announced a major reduction of up to 27.71 percent in the prices of liquefied natural gas, issuing a notification of the revised rates.
According to the notification, the price of LNG for the Sui Northern system has been reduced by $6.81 per MMBTU, bringing the new price to $19.03 per MMBTU. The previous price of LNG on the Sui Northern system was $25.84 per MMBTU.
For the Sui Southern system, the price of LNG has been cut by $6.95 per MMBTU, taking the new rate to $18.13 per MMBTU. The earlier price of LNG on the Sui Southern system was $25.08 per MMBTU.
The reduction is among the steepest single-month adjustments recorded in the regulator’s LNG pricing cycle, amounting to roughly a quarter of the previous rate on both networks.
LNG prices in Pakistan are determined by OGRA on a monthly basis and are built up from several components. These include the delivered ex-ship cost of the cargoes received during the period, regasification charges levied by the terminal operators, port charges, transmission and distribution costs, and the margins of the companies handling the gas through the system.
Because the delivered cost varies according to the mix of cargoes received in a given month, the notified price moves with the composition of that mix. Pakistan sources LNG through a combination of long-term contracts, in which the price is linked to a percentage slope of Brent crude, and spot purchases, which track the prevailing international market at the time of procurement. A month weighted toward cheaper cargoes produces a lower notified rate, and vice versa.
The difference between the two networks reflects their separate cost structures. Sui Southern Gas Company operates the transmission and distribution system in Sindh and Balochistan and is closer to the import terminals at Port Qasim, while Sui Northern Gas Pipelines Limited carries gas onward to Punjab and Khyber Pakhtunkhwa over considerably greater distances, incurring higher transmission costs in the process.
The reduction carries implications across several sectors. LNG is a principal feedstock for gas-fired power generation, for a substantial share of industrial fuel use — particularly in textiles, fertiliser and cement — and for supply to captive power plants and the CNG sector. A fall of this magnitude in the input cost feeds into the fuel component of electricity tariffs and into industrial production costs, though the transmission of that benefit to end consumers depends on the tariff determination process and the timing of quarterly adjustments.
The timing is also notable given conditions on the ground. Sources in the power sector have reported that disruption in LNG supply has reduced output from gas-fired plants, contributing to a widened gap between demand and available generation during evening peak hours. Availability of cargoes, rather than their price, remains the more immediate operational constraint.
Pakistan has become structurally dependent on imported LNG as indigenous gas reserves have depleted, with domestic fields in long-term decline and demand continuing to grow. That dependence links a significant share of the country’s energy costs directly to international market movements and to the rupee-dollar exchange rate, since the notified prices are denominated in dollars per MMBTU.
The revised rates take effect under the notification issued by the regulator.
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