RLNG price hike hits industrial sectors

Key industrial sectors have been exposed to losses of billions of rupees as Ogra has increased Regassified Liquid Natural Gas RLNG with effect from July 1, 2016, by 67 cents to $9.11 per-mmbtu for consumers on transmission lines and $9.94 per-mmbtu for consumers that fall on distribution gas lines.

As per the latest decision taken by Ogra on June 2, 2017, the RLNG prices have increased by 67 cents per-mmbtu putting textile, fertilizer, general industry, power and CNG sectors in the danger zone, as with the decision textile sector will alone has to pay  additional Rs 5.50 billion whereas CNG sector will have to pay Rs 750 million more.

Since the cost of the fuel is  passed on to consumers in electricity tariff, end consumers of electricity generated by LNG based power plants will end up absorbing the hit of Rs 0.44 per unit. The textile and CNG sectors are upset over the development.

Right now, the textile sector is paying Rs 11 per unit for electricity which is much higher than the regional competitive countries as in Bangladesh textile sector is being provided electricity at Rs 7 per unit. And the gas is being provided to the textile sector in Pakistan at Rs1,001 per-mmbtu, whereas in Bangladesh the industries sector is being provided at Rs 400 per-mmbtu. Now in the latest scenario, Ogra has further increased the LNG cost that will further aggravate the situation of textile sector.


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