Engro Polymer to buy costlier RLNG in winter

In view of the expected gas shortages in the winter season, Engro Polymer and Chemicals Ltd has signed an “interim agreement” with the state-owned Sui Southern Gas Company Ltd (SSGC) for the supply of fuel based on the industrial/commercial pricing for re-gasified liquefied natural gas (RLNG). The company will buy the imported gas — whose rate is over three times higher than that of the locally sourced fuel supplied by the same state-owned utility — as per the price notified by the Oil and Gas Regulatory Authority (Ogra) from time to time on an as-and-when available basis. According to Arif Habib Ltd analyst Rao Aamir Ali, the company is currently buying gas at Rs1,087 per million British thermal unit (mmBtu). However, the Ogra-notified rate of the imported gas or RLNG for November is $14.81 or Rs3,318 per mmBtu. The threefold increase in the fuel cost will push up the price of polyvinyl chloride (PVC), a company product that’s among the most common polymers with extensive uses in industrial, technical and everyday applications.