Government Approves Deregulation of RLNG Sale Price

The government has approved deregulation of sale price of RLNG that will be settled between LNG suppliers/importers, gas companies based on all relevant factors, The Truth Pursuit has learnt.

The deregulation of sale price of RLNG is finalized which is to be settled between LNG suppliers/importers, gas companies and RLNG consumers.

According to approved summary forwarded by Ministry of Petroleum & Natural Resources before the ECC stating that the competent forum vide case no. ECC-87/11/2015 dated 06.09.2015 considered  a summary submitted by this ministry on “sale price of RLNG” and while approving the proposals of the summary constituted a committee comprising Secretary Finance Division (Convener), Secretary Ministry of Water & Power, Secretary Ministry of Petroleum & Natural Resources and Secretary Law, Justice & Human Rights to review the pricing mechanism after three months and submit report to ECC for consideration.

Two meeting of this committee were held on 30.12.2015 and 05.01.2016 in the finance Division.

The committee discussed at length the submissions made by M/S PSO, M/S SSGCL and M/S SNGPL in respect of sale price of RLNG and the views of OGRA & PQA in this respect.

The recommendation of the committee as enumerated in the report are as under:

  1. LNG DES Price to be taken as per Contract(s)
  2. Port charges will also be taken at actual including amount reimbursed to supplier as per relevant agreement. There was a consensus that all relevant cost may be allowed to PQA to sustain its operations along with a reasonable profit margin.
  3. PSO was advised to take up the matter with Sindh government for non-applicability of Sindh Infrastructure Cess in line with other “Petroleum Product”. The Ministry of Petroleum and Natural Resources was also advised to facilitate PSO accordingly. It was also agreed that pending the ultimate settlement of this issue, the said Cess will also be included in RLNG Price.
  4. PSO Margin will be determined at 2.50%.
  5. All charges under LSA including but not limited to capacity charges as well as Retainage are to be included at actual. SSGC/PSO will share all relevant details with OGRA.
  6. SSGC’s Margin for LSA Management to be determined @ $0.025/MMBTU to be treated as non-operating income.
  7. Transmission Loss to be determined and charged at actual subject to a maximum of 0.5% (to be shared by gas companies based on length of Transmission Line involved).

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