New Delhi: The government has raised the ceiling on administered price mechanism (APM) gas to USD 7 per million British thermal unit for state-run Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL). The increase, from USD 6.75 per mmBtu, applies to gas produced from legacy and nomination fields that continue to operate under government-controlled pricing.
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The change follows the pricing framework approved in 2023, which links rates for legacy gas to 10 percent of the monthly average of the Indian Crude Basket, with prices notified every month.
While the computed price for April stands higher, the payable rate remains constrained by a floor and ceiling mechanism. The Petroleum Planning and Analysis Cell (PPAC) said the monthly price works out to USD 10.76 per mmBtu on a gross calorific value basis.
“For the gas produced by ONGC/OIL from their nomination fields, the above-mentioned APM price shall be subject to a ceiling of USD 7 per mmBtu on GCV basis for the same period,” PPAC said.
The ceiling, originally fixed at USD 6.5 per mmBtu for two years beginning 2023-24, was designed to increase gradually. It was first raised to USD 6.75 from April 2025 and has now moved up again to USD 7.
Gas under the APM regime constitutes a significant portion of India’s domestic production — about 92 million standard cubic metres per day, or roughly 60 percent of total output. Any revision in its price directly feeds into key consuming sectors, including fertiliser manufacturing, city gas distribution for CNG and piped cooking fuel, as well as industrial usage.
The government has also allowed a 20 percent premium over APM rates for incremental output from new wells and interventions in nomination fields operated by ONGC and OIL.
Separately, producers in difficult terrains — such as deepwater, ultra-deepwater and high-pressure-high-temperature areas — have marketing and pricing freedom, with rates capped through a separate mechanism. For the period from October 1, 2025 to March 31, 2026, this ceiling stands at USD 9.72 per mmBtu. The cap for the next six-month window starting April 2026 is yet to be announced.
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The latest revision comes at a time when global energy markets remain under strain following the West Asia conflict, which has pushed crude oil prices sharply higher, crossing USD 100 per barrel after a steep rise in recent weeks.
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