Pakistan seeks 50% price cut for Iran gas

According to The Express Tribune, Islamabad wants Tehran to cut the price of gas flowing through the Iran-Pakistan (IP) pipeline by as much as 50%. Pakistan is also seeking a smaller volume under the project, since several domestic sectors are unwilling to take supplies at higher prices. Local distribution companies currently charge fertiliser plants Rs1,500 per mmBtu, or $5.7, and domestic consumers Rs1,000 per mmBtu, or $3.57.

Power producers have said they cannot afford imported gas above Rs2,000 per mmBtu, a level the government has set as a commercially sustainable benchmark for the pipeline. According to official calculations, the present IP price stands at $10.6 per mmBtu, or Rs2,970, while transport from Hub to Nawabshah adds $1.25 per mmBtu. A proposed formula of 6.11% of Brent plus $1 would lower the price to $4.67, $5.28 and $5.89 per mmBtu at Brent levels of $60, $70 and $80 per barrel.

PSO is already importing Qatari LNG under a contract, so officials must absorb that gas to avoid damage claims from Doha. Exploration companies have also absorbed multibillion-rupee losses, since gas from their fields was cut back to free up space for LNG. Pakistan has said it could proceed if US President Donald Trump grants Iran a waiver, and the project has not advanced because of sanctions.