Pakistan's energy consumers are bracing for another jolt as the cost of regasified liquefied natural gas (RLNG) has hit an unprecedented high. The Oil and Gas Regulatory Authority (Ogra) has notified a record 32 per cent hike for August, pushing the rate to $25.83 per mmBtu for Sui Northern Gas Pipelines Limited (SNGPL) and $25.09 per mmBtu for Sui Southern Gas Company Limited (SSGCL). The increase, the steepest in the commodity's decade-long history, translates into a retail price of around Rs7,204 per mmBtu and comes amid a broader backdrop of rising fuel costs and mounting circular debt in the gas sector. Main Developments August's RLNG price adjustment is built on five imported cargoes procured from the spot market, as no shipment could be secured from Qatar due to the US war on Iran. This marks the second consecutive monthly increase, following a roughly 15 per cent rise in July when the rate was fixed at $19.52 per mmBtu for SNGPL and $18.63 per mmBtu for SSGCL. Compared with February's price of $10.45 per mmBtu, the August rate is around 148 per cent higher. Alongside the RLNG hike, Ogra also notified a 5.4 per cent increase in liquefied petroleum gas (LPG) prices for August, setting the rate at Rs254.32 per kg effective from Aug 1, up from Rs241.43 per kg in July. The sharp increase in RLNG rates is expected to significantly raise fuel costs for power generation, with the impact already visible in May when the fuel cost for RLNG-based power generation rose to Rs31 per unit, compared with Rs13.72 per unit in April. Read also: Pakistan Banks Headed for Another Year of Reliance on Govt Debt In a separate but related development, Ogra has belatedly disclosed that it reduced the prescribed prices for gas utilities by Rs134 per unit, a 7.4 per cent cut resulting in savings of around Rs50 billion. These savings will be redirected to circular debt adjustments rather than providing relief to consumers through lower gas prices. The regulator finalised this determination on June 23 and shared it with the government but, for the first time in its two-decade history, did not upload it to its website immediately. Ogra eventually published the determinations this week after several interveners at public hearings raised concerns about the delay. The government has remained silent on the matter, although it has already informed the International Monetary Fund (IMF) that consumer-end gas prices would remain unchanged. A senior government official confirmed that the savings from lower revenue requirements would be used to reduce the gas sector's circular debt, which was last reported at around Rs3.5 trillion. Background Ogra's prescribed price determinations are meant to set the revenue requirements for gas utilities, which then form the basis for consumer-end tariffs. Since its inception two decades ago, the regulator has publicly released these determinations while simultaneously sharing them with the government, often holding press briefings on the details. The June 23 determination, however, marked a departure from this practice, with the regulator remaining silent on queries for over a month. The fresh determinations would allow annual revenue of around Rs817 billion to the two gas utilities during the current fiscal year — Rs501 billion for SNGPL and Rs315.8 billion for SSGCL. For SNGPL, the prescribed gas price was reduced by Rs134 per mmBtu to Rs1,719 for FY2026-27 from Rs1,853 per mmBtu in FY2025-26, resulting in an annual revenue surplus of around Rs46.3 billion. Ogra stated it provisionally determined this surplus after considering points raised by interveners, clarifications from the petitioner, and scrutiny of the petition. The regulator noted that the surplus would be adjusted against previous years' shortfalls in accordance with the Federal Cabinet's decision of June 30, 2024, which directed that prior-year shortfalls be adjusted to the extent possible during the current financial year. For SSGCL, the prescribed price was reduced by Rs86 per mmBtu, resulting in savings of Rs2.5 billion. SSGCL had sought an estimated revenue requirement of Rs1.274 trillion, including Rs545.28 billion in unrecovered shortfalls from previous years. Why It Matters The record RLNG price hike carries significant implications for Pakistan's energy sector and broader economy. Power generation costs are set to rise sharply, which could translate into higher electricity tariffs for consumers and industrial users alike. The decision to channel Rs50 billion in savings into circular debt adjustment rather than consumer relief highlights the government's prioritisation of financial stabilisation over immediate price relief. The gas sector's circular debt, already at around Rs3.5 trillion, remains a critical structural challenge. By using the savings to address this debt, the government is attempting to shore up the financial health of gas utilities, but the move also means consumers will not benefit from the lower prescribed prices.