ISLAMABAD: Petroleum prices nationwide and electricity tariffs for K-Electric (KE) consumers are expected to decrease in the coming days, following a substantial reduction of up to 14% in regasified liquefied natural gas (RLNG) prices for May.
The Oil and Gas Regulatory Authority (OGRA) on Tuesday announced the cut in RLNG rates for sales at the transmission stage by the two main gas companies — Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL).
Estimates suggest petrol and diesel prices may fall by Rs3 to Rs7 per litre over the next fortnight. A reduction of Rs3.5 per litre in petrol and Rs7 in high-speed diesel (HSD) is expected, driven by lower global oil prices and a slight drop in petrol import premiums. These adjustments, however, are contingent upon the government maintaining existing tax rates.
RLNG Price Cuts
According to OGRA’s notification, SNGPL’s RLNG transmission rate has dropped by 12.42% to $11.026 per million British thermal units (mmBtu) for May, down from $12.59 in April. At the distribution level, the price was cut by 12.51% to $11.79 per mmBtu.
SSGCL saw its RLNG transmission price fall by 13.62% to $9.74 per mmBtu, while the distribution rate dropped 13.64% to $10.87 per mmBtu.
The reductions are attributed to a decline in delivered LNG costs at port. For SSGCL, transmission and distribution prices fell by $1.53 and $1.72 per mmBtu, respectively. SNGPL’s rates were reduced by $1.56 and $1.69.
Despite these reductions, RLNG distribution prices remain significantly higher than the delivered cost ex-ship — $8.13 per mmBtu — due to added charges such as importer margins, port retainage fees (3.15% and 3.1% of DES, respectively), and system losses (7.4% for SNGPL and 10.6% for SSGCL).
The RLNG pricing for May is based on 10 LNG cargoes received under PSO’s contracts with Qatar Gas — six priced at $7.24 and four at $9.48 per mmBtu. Pakistan LNG Ltd did not import any cargo this month due to decreased demand.
Fuel Price Outlook
Petrol and diesel prices are projected to decline based on international trends. Petrol prices dropped $1.5 per barrel, while HSD prices saw a $3 decline over the past two weeks. The current ex-depot prices are Rs252.63 per litre for petrol and Rs256.64 for HSD.
Any downward adjustment would bring relief, especially for middle and lower-income groups, as petrol is widely used in private transport and small vehicles.
K-Electric Update
Meanwhile, K-Electric has submitted a petition to the National Electric Power Regulatory Authority (NEPRA), requesting that not all the cost savings from lower fuel prices be passed on to consumers. The company is seeking to reserve part of the savings to offset Rs14.6 billion in past dues related to partial load, plant startup, degradation, and open-cycle operations from July 2023 to March 2025.
NEPRA has already set aside Rs9.4 billion in similar claims by withholding part of the fuel cost benefit from consumers between November 2024 and January 2025. A public hearing on the new petition is scheduled for May 22.
Despite this, KE consumers are still expected to receive a Rs5.02 per unit refund in June as part of the fuel cost adjustment for March, amounting to a total benefit of Rs6.8 billion.
