The Oil and Gas Regulatory Authority (Ogra) has reduced regasified liquefied natural gas (RLNG) prices for September by around 20%, following the arrival of two lower-cost LNG cargoes from Qatar. The reduction has brought down the cost of imported LNG and is expected to ease fuel costs for power generation. The latest pricing adjustment follows a sharp decline in the average delivered ex-ship (DES) price of LNG cargoes received during September compared with the rates recorded in the previous two months.
The average DES price of the two LNG cargoes received in September stood at $10.06 per million British thermal units (mmBtu). This was significantly lower than the $12.12 per mmBtu average recorded in August and the $18.96 per mmBtu recorded in July. On a monthly basis, the September average was around 20% below August, while it was approximately 47% lower than the July level. The July price had been pushed higher after five expensive cargoes were procured from the international spot market at short notice amid supply disruptions.
For Sui Northern Gas Pipelines Limited (SNGPL), Ogra reduced the RLNG sale price at the transmission stage by 19.99% in September. The rate declined to $13.99 per mmBtu from $17.49 per mmBtu in August. At the distribution stage, SNGPL’s RLNG price fell by 20.14%, declining to $15.196 per mmBtu from $19.02 per mmBtu. SNGPL supplies consumers in Punjab and Khyber Pakhtunkhwa, making the revised rates relevant to RLNG users across these regions.
Sui Southern Gas Company Limited (SSGCL) also received a substantial reduction in its RLNG prices. The company’s transmission-stage price declined by 21.53% to $12.611 per mmBtu in September from $16.07 per mmBtu in August. At the distribution stage, the price decreased by 21.57%, falling to $14.22 per mmBtu from $18.13 per mmBtu. SSGCL is responsible for supplying consumers in Sindh and Balochistan, meaning the revised pricing applies to the RLNG supply chain serving these areas.
Despite the reduction in regulated RLNG prices, distribution-stage rates remain above the $10.06 per mmBtu average DES cost of the September cargoes. SSGCL’s distribution-stage price of $14.22 per mmBtu is approximately $3.3 higher than the delivered cargo price, while SNGPL’s rate of around $15.19 per mmBtu is roughly $4.2 higher. The difference between the cargo cost and the final RLNG price reflects additional expenses incurred as imported LNG moves through the public-sector supply chain.
Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL), which are involved in LNG imports, along with port authorities, add retainage and profit margins to the LNG cost. These charges are equivalent to 3.77% of the DES price. Additional costs also arise from losses within the gas transmission and distribution systems, contributing to the difference between the original delivered cargo price and the final distribution-stage RLNG rate.
System losses have also increased for both major gas utilities compared with levels recorded last year. SNGPL’s distribution-stage losses currently stand at 8.97%, compared with 7.47% in October last year. SSGCL’s losses are reported at 12.55%, compared with around 10.6% last year. These losses form part of the broader cost structure associated with delivering imported LNG to consumers and are reflected in the pricing framework used for RLNG.
The September reduction follows the arrival of lower-cost Qatar cargoes and marks a significant change from the elevated LNG import costs recorded in July. The decline in the average cargo price has translated into lower transmission and distribution-stage RLNG rates for both SNGPL and SSGCL. With RLNG widely used in the energy system, the reduction in fuel costs could also affect the cost of power generation, while the final impact will depend on the broader LNG supply chain and related system costs.
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