It was optimistic thinking on the part of consumers that in the wake of reduced oil prices OGRA will be constrained to reduce RLNG price to levels which make RLNG affordable for locals. Common consumers in domestic, commercial and industrial categories who have no associations like APTMA, APCMA and FMPAC in Pakistan to watch their interests are swiftly losing confidence in OGRA. CONSUMERS HAVE BEEN CONTINUOUSLY MISTAKEN IN RELYING ON OGRA FOR SAFEGUARD OF CONSUMER INTERESTS because of continuation of anomalies in OGRA RLNG pricing notification. Despite a significant reduction in world oil prices OGRA has been consistent about its determination that supports continuation of anomalies in RLNG Pricing.
Before COVID-19 outbreak the loading in RLNG price over and above LNG DES price was around 25%, charged as a cost to deliver RLNG at consumer premises. However, in June 2020 this price loading has crossed 50% over and above LNG DES Price for PSO and 72% over and above LNG DES Price for PLL – great job done by OGRA for SSGC, SNGPL, PSO and PLL as their “percentage take” in RLNG business is consistently rising in an era of falling oil prices.
Pakistan energy managers and leaders are constrained to import costly LNG from Qatar due to long term LNG SPA signed by PSO. As such cheap LNG available to PLL is of lesser use to the public. Additionally, MoE-Petroleum Division has locked horns with PGPL terminal operator despite its terminal charges being lesser than those charged by Engro Elengy terminal. This action by MoE-Petroleum Division is only facilitating “smooth business for Engro Elengy as well as PSO” despite higher terminal charges and higher LNG DES Price. No benefit is foreseen for consumers despite “hectic efforts by MoE-Petroleum Division” in safeguarding interests of PLL against PGPL.
Is OGRA Adding Insult to Injury for Gas Consumers
YES …… OGRA is simply adding insult to injury suffered by Pakistani nation in the form of misconduct and incompetence of people heading Public sector enterprises in energy sector during 2015 to 2018. Incompetence of PSO to execute prudent SPA and misconduct by then MD ISGS, MD SNGPL and MD SSGCL in facilitating implementation of Engro Elengy Terminal Contract in the absence of back-to-back arrangements for risk transfer forced the consumers into buying the so called “cheapest LNG in the world” – as trumpeted by Ex-PM Excellency Shahid Khaqan Abbasi.
Simple mathematics shown in figure above makes is obvious that gas consumers in Pakistan are suffering. A common consumer on distribution network is constrained to pay RLNG price which gets 50 – 72% loaded within Pakistan – from port to consumer premises. A price premium in the range of 15 – 20% over and above LNG DES price can be justified for transportation and associated costs, but loading of 50 – 72% cannot be justified under any stretch of imagination. However, continuation of anomalies in RLNG pricing has been happening in Pakistan under the auspices of OGRA – the Independent Energy Regulator.