Page 7 - AsiaElec Week 32 2021

AsiaElec COMMENTARY AsiaElec
allegations it had kept the results secret, noting that it “always maintains absolute transparency in all its business dealings and practices”.
PSO added: “All bid results are published on PSO’s website as per Public Procurement Regu- latory Authority (PPRA) rules.”
The state company pointed to the 10-year supply contract that it signed with Qatar Petro- leum in February, noting that the deal would help to reduce the country’s LNG import bas- ket price. It added: “Considering the higher demand in the upcoming winter season, PSO has exercised the option in the new QP contract for bringing four additional cargoes in Novem- ber and December at the new contractual prices, which are expected to be much lower than the market price during winter.”
After the furore caused by Ogra’s notice, the body withdrew the August 2 notification and explained that the incorrect price had been posted as a result of its calculations having been based on various provisional pricing compo- nents and that they had not been finalised using actual incurred costs.
What next
Pakistan’s decision to re-enter the spot mar- ket despite high prices is unsurprising, given reports last month that PLL’s decision to cancel eight cargoes owing to their high price had set the country up for a gas shortage in September and October.
The knock-on effect from buying more expensive gas will be passed on to the end-user. The government has already hiked RLNG prices for gas utilities Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipelines Ltd’s (SNGPL) end-users.
SSGCL customers saw their rates increase by 5.59% this month to $13.34 per mmBtu ($368.98 per 1,000 cubic metres), while SNG- PL’s customers will pay 5.36% more at $13.6 per mmBtu ($376.18 per 1,000 cubic metres), the Express Tribune reported on August 3.
The paper said PSO had lined up six LNG cargoes to arrive in August, while PLL had arranged for the delivery of six spot deliveries.
Pakistan will likely continue paying higher LNG prices if it is to avoid gas supply shortfalls, a strategy that will expose the government to per- sistent criticism whether fairly earned or not.™
Week 32 11•August•2021
w w w . N E W S B A S E . c o m P7