ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Friday notified an increase of up to 15.3 per cent in the price of Regasified Liquefied Natural Gas (RLNG) for sales at the distribution stage by the two Sui gas companies for October, mainly due to higher crude prices.

The increase has come after a 20pc price reduction for September.

This is expected to have a significant impact on fuel cost for power generation in December. The RLNG-based power generation cost in September amounted to Rs40 per unit based on the average RLNG import price of $10.06 per million British thermal unit (mmBtu), compared to $10.75 per mmBtu in October.

The average delivered price ex-ship of LNG for two cargoes in October amounted to $10.75 per mmBtu, compared to $10.06 per mmBtu in September, $12.12 per mmBtu in August and $18.96 per mmBtu in July.

Karachi-based Sui Southern Gas Company Limited (SSGCL) serves consumers in Sindh and Balochistan, and its system losses at the distribution stage stand at 12.55 per cent, compared to about 10.6pc last year.

On the other hand, Lahore-based Sui Northern Gas Pipelines Limited (SNGPL) provides gas to consumers in Punjab and Khyber Pakhtunkhwa, and its system losses at the distribution stage were also reported at almost 9pc against 7.47pc in October last year.

According to the notification, RLNG’s sale price for SNGPL at the transmission stage increased by 13.9pc to $15.94 per mmBtu for October compared to $13.99 per mmBtu in September. The sale price at the distribution stage for SNGPL was, thus, increased by 14pc to $17.33 per mmBtu for October, against $15.196 per mmBtu in September.

Meanwhile, RLNG sale price for SSGCL has been increased at the transmission stage by 15.25pc to $14.53 per mmBtu for October, against $12.611 per mmBtu in September. The sale price at the distribution stage for the company thus also increased by 15.27pc to $16.396 per mmBtu for October compared to $14.22 in September.

Ironically, the inherent cost additions in the supply chain — all of them in the public sector — continue to make the end-RLNG price higher. This can be seen from the fact that the RLNG distribution prices — $16.396 per mmBtu for SSGCL and $17.33 per mmBtu for SNGPL — are almost $6.58 and $5.65 per mmBtu higher than the average $10.75 per mmBtu delivered price ex-ship (DES), respectively.

This is mainly because of the fact that both the LNG importers — Pakistan State Oil and Pakistan LNG Limited — and port authorities also charge profit margins on account of retainage and margins, at the rate of 3.77pc of DES price. This is on top of 8.97pc system losses (SNGPL) and 12.55pc losses (SSGCL).

The basket RLNG price was based on two cargoes each in October — both from Qatar — under two separate long-term contracts of 13.37pc and 10.20pc of Brent.

PSO has a long-term contract for up to 11 cargoes per month, but part of these supplies were usually diverted to the spot market, even before the Middle East crisis, when Qatar declared force majeure after the US attack on Iran, the closing of the Strait of Hormuz and the suspension of gas operations at the field.

ISLAMABAD: Pakistan and Saudi Arabia agreed on Friday to strengthen strategic cooperation in oil storage, refinery upgrades, crude oil and liquefied petroleum gas (LPG) procurement, and the minerals sector to promote bilateral economic ties, according to a statement issued by the Petroleum Division.

Saudi Arabia also announced the immediate introduction of same-day visa processing for Pakistani citizens at its embassy in Islamabad.

Pakistan has been planning to boost domestic storage for crude oil and refined products to increase its energy security. With no strategic petroleum reserves, the country has been left exposed to oil supply shocks resulting from the US-Iran war that has choked supplies through the Strait of Hormuz.

The developments were announced after Petroleum Minister Ali Pervaiz Malik met Saudi Arabia’s new ambassador to Pakistan, Dr Rajeh bin Tami Al-Baqami, to discuss opportunities for enhancing cooperation in the mining, petroleum and energy sectors, including strategic oil storage, refinery upgrades, LPG supplies and commercial engagement.

The minister appreciated the longstanding strategic partnership between the two countries and said Pakistan had approved a tax-neutral bonded policy modelled on international energy hubs such as Fujairah and Singapore, according to the statement.

“Under this framework, Saudi companies can establish commercial oil reserves in Pakistan without local tax liabilities, offering an opportunity to diversify maritime transit risks associated with the Strait of Hormuz and Bab al-Mandab while facilitating access to Asian markets,” the statement said.

“The petroleum minister highlighted that strategic oil storage facilities in Pakistan would provide Saudi Arabia with greater flexibility in managing supply routes and accessing regional markets,” it added.

The statement further quoted the minister as saying that Pakistan planned to develop a major petroleum storage and refining complex at Hub in Balochistan under the guidance of Technip Energies UK.

“The proposed facility, supported by the prime minister and the chief of defence forces, will have the capacity to accommodate Very Large Crude Carriers (VLCCs) and strengthen Pakistan’s potential as a regional energy corridor serving Central Asian and Chinese markets,” the statement quoted Malik as saying.

Malik also briefed the ambassador on investment opportunities under Pakistan’s ongoing refinery upgradation programme, which aims to modernise domestic refining infrastructure, improve operational efficiency and facilitate a transition to Euro-5 fuel standards.

He said the programme offered significant opportunities for Saudi investment and participation in Pakistan’s refining sector.

Appreciating Saudi Arabia’s support during recent global market disruptions, the minister thanked the Saudi authorities at Yanbu port for prioritising crude oil shipments to Pakistan.

He also discussed coordination with Saudi Aramco to increase crude oil procurement and arrange dedicated LPG shipments to meet Pakistan’s energy needs, particularly amid an anticipated rise in domestic gas demand during winter.

Both sides underscored that the strong defence and strategic partnership between Pakistan and Saudi Arabia provides a foundation for broader regional peace, stability and economic cooperation.

The Saudi envoy expressed Riyadh’s deep appreciation for Pakistan’s longstanding support, saying the two countries stood together in all circumstances.

The ambassador emphasised that the two countries’ defence and energy cooperation frameworks aimed to promote peace, stability and economic growth across the region.

The minister also announced that the Saudi embassy in Islamabad had introduced same-day processing of visa applications for Pakistani citizens to facilitate travel and strengthen business, cultural and people-to-people exchanges.

Malik invited Saudi Arabia’s Vice Minister of Mining, Khalid al-Mudafier, to attend the Pakistan Minerals Investment Forum, scheduled to be held in Islamabad on November 12 and 13, highlighting further opportunities for cooperation and investment in Pakistan’s minerals sector.

Both sides expressed their commitment to strengthening their longstanding relationship through enhanced cooperation, investment and mutually beneficial partnerships in the energy and petroleum sectors.

The minister assured the ambassador that Pakistan deeply valued its historic relationship with Saudi Arabia and remained committed to expanding cooperation across strategic sectors.

Earlier in July, Prime Minister Shehbaz Sharif directed authorities to increase the country’s strategic petroleum reserves as a cabinet committee approved amendments to the oil refining policy.

ISLAMABAD: A private think tank has found more fiscal faults than benefits of the much-discussed creation of new provinces, advising priority to stronger local governments instead of new provinces if public service delivery was actually intended.

In its latest market analysis release on Thursday, Policy Research Institute of Market Economy (Prime) highlighted the additional annual recurring cost of Rs47 billion to Rs57bn in case of creation of two more provinces — South Punjab, Bahawalpur and remaining Punjab — and up to Rs730bn if 30 divisional units were to upgrade to provincial status.

“Any proposal for creating new provinces should include a formal fiscal costing exercise before constitutional or legislative changes are pursued”, the think tank said, adding that the costing should estimate the recurring expenditure required for the governor, chief minister, provincial assembly, secretariat, high court and other core institutions, together with the likely NFC resource envelope of each proposed unit. This would make it possible to assess whether the expected administrative benefits justify the additional recurring burden,” it said.

If the number of provinces increases to six, South Punjab receives an illustrative allocation of Rs1tr under the existing NFC, while Bahawalpur receives Rs537bn. In case of 30 provinces, allocations differ considerably, ranging from Rs7201bn for Lahore and Rs691bn for Karachi to Rs46bn for Loralai and Rs50bn for Zhob. Thus 11 of the 30 proposed units receive less than Rs150bn per annum.

Think tank puts annual recurring bill at Rs47-57bn for two provinces and up to Rs730bn for 30

The estimated annual recurring cost of a new provincial government is Rs22.4bn under the low-cost scenario and Rs25.9bn under the high-cost scenario, therefore Rs47-56bn per annum for two and Rs610-730bn for 30 provinces.

Using a 10pc fiscal sustainability benchmark based on the low recurring-cost estimate, 16 of the 30 proposed provinces would remain at or below the threshold, while 14 exceed it. The burden is particularly high in the smallest units: the core provincial structure would absorb around 49pc of Loralai’s allocation, 45pc of Zhob’s and 37pc of Rakhshan’s even under the low-cost estimate.

Every proposed province with a population below 1.2 million would require more than one-third of its NFC allocation to finance the core provincial government structure.

The findings therefore show that the fiscal implications of restructuring depend strongly on the number and size of the provinces created. Limited restructuring involving relatively large units produces a much smaller recurring burden, whereas several smaller division-based provinces would face disproportionately high administrative costs relative to their expected NFC resources.

Therefore, at the fiscal level, creation of new provinces will put additional pressure on fiscal resources of smaller provinces, especially those with lower NFC allocations and constrained revenue generation capacity. A greater portion of their available resources would be consumed by ongoing government expenses, resulting in reduced fiscal room for other provincial spending, such as public service provision and developmental expenditure, the analysis showed.

Therefore, the think tank emphasised that provincial restructuring should be evaluated not only in political and administrative terms, but also through a clear fiscal framework.

Published in Dawn, October 30th, 2026

• CPPA seeks Rs2.56 per unit additional fuel cost adjustment to recover Rs33bn
• Industrial representatives insist fuel levies inflating generation costs

ISLAMABAD: The manufacturing sector and the power division on Thursday unanimously called for the removal or reduction of the petroleum levy on furnace oil and diesel used for power generation, stressing that it was resulting in about Rs10 per unit additional impact to electricity costs.

The demand emerged during a public hearing on the Rs2.56 per unit additional monthly fuel cost adjustment (FCA) sought by power companies to recover about Rs33 billion for electricity consumed in September.

The National Electric Power Regulatory Authority (Nepra) conducted the hearing on a request by the Central Power Purchasing Agency (CPPA) to allow distribution companies to charge the additional FCA in November bills. A government official said the proposed adjustment was the highest for comparable months in recent years.

Industrial representatives Amir Shaikh, Arif Bilwani, Tanveer Bari and Rehan Javed, representing various chambers of commerce and industry, said the government was charging substantial petroleum levies — about Rs76,000 per tonne on furnace oil and Rs80 per litre on diesel — which could otherwise be reduced to lower generation costs amid the energy crisis arising from the Iran conflict.

Representatives of entities under the power division confirmed that furnace oil- and diesel-based generation accounted for 3.6 per cent of total power generation in September because of the unavailability of liquefied natural gas (LNG) and other cheaper sources.

Industrial representatives said removing the levies could reduce generation costs from around Rs62 per unit to Rs44-50 per unit.

They argued that the levy was also increasing the government’s subsidy burden, effectively shifting money from one pocket to another.

The representatives said the prime minister had previously removed certain charges to subsidise power tariffs, but the relief had since been discontinued. They also pointed out that continuation of the surplus incremental package was imposing an additional burden of around Rs11 per unit on grid consumers and demanded its immediate suspension.

Naveed Qaiser, chief financial officer of the Power Planning and Monitoring Company (PPMC), agreed that petroleum levies on diesel and furnace oil had a substantial impact on generation costs.

He said the power division had been fighting for their removal or reduction at relevant forums and urged business representatives to continue raising the issue with senior government officials.

Mr Qaiser said reducing electricity tariffs remained a government priority, particularly for industry, to improve competitiveness with regional economies.

He said these efforts had already helped reduce tariffs by around Rs10 per unit for consumers generally and up to Rs18 per unit for industry, achievements that should also be acknowledged.

CPPA’s Rehan Akhtar said the actual fuel cost in September stood at Rs10.022 per unit against the reference rate of Rs7.46, resulting in the request for an additional FCA of Rs2.56 per unit.

He said the total financial impact was estimated at Rs32.76bn, mainly because of changes in the generation fuel mix and higher costs of alternative fuels.

However, he maintained that the net increase in the FCA would not exceed Rs1.45 per unit, as the existing positive adjustment in October would expire and be replaced by the proposed Rs2.56 adjustment in November.

Nepra and industrial representatives also raised concerns over discrepancies in power generation data submitted by the CPPA and demanded greater transparency.

They questioned a previous adjustment of Rs16bn on account of LNG prices, arguing that timely reporting of those prices could have avoided a substantial portion of the proposed additional FCA.

Officials from Nepra’s Monitoring and Enforcement Division also questioned the authenticity and consistency of information supplied by government entities.

Nepra member Amina Ahmed acknowledged the concerns, saying the regulator was aware of the discrepancies but did not want to turn the proceedings into a “circus” by publicly taking up every inconsistency.

Industrial representatives also questioned coal procurement practices at the Port Qasim power plant, alleging that the producer was procuring coal through affiliated entities at prices significantly higher than those paid by other plants.

They demanded a comprehensive investigation, including by the National Accountability Bureau. Nepra assured participants that only prudent coal costs would be allowed and that the producer would have to bear the impact.

Government entities reported a 6.5pc increase in overall power demand in September, including a 6.7pc rise in industrial consumption.

Industry representatives maintained that the higher industrial consumption reflected a shift from captive power generation to the national grid rather than the impact of the incremental package.

Average fuel cost surged by almost 37.5pc year-on-year in September, mainly because expensive, heavily taxed fuels were used to compensate for reduced LNG supplies amid the regional conflict and increased reliance on imported coal.

According to CPPA data, high-speed diesel (HSD) accounted for 213 gigawatt-hours (GWh), or about 1.6pc of total grid supply, at a generation cost of Rs62.14 per unit. This compared with 80GWh generated at Rs54 per unit in August.

Furnace oil-based generation stood at 263GWh in September, down from 321GWh in August, while its generation cost declined to Rs44.86 per unit from around Rs46.

Its share of total generation remained close to 2pc.

Published in Dawn, October 30th, 2026