Govt reduces natural gas price for October to USD 7.48/mmBtu

New Delhi: The government has reduced the price of domestically produced natural gas from USD 7.85 per million metric British thermal units (mmBtu) in September to USD 7.48/mmBtu in October, an official notification said. “In accordance with MoPNG’s notification No.L-12015/1/2022-GP-II dated 7th April 2023, the price of Domestic Natural Gas for the period 1st October 2024 to 31st October 2024 is notified as US$ 7.48/MMBTU on Gross Calorific Value (GCV) basis,” said an official notification.

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Under the new gas pricing regime, the price of natural gas produced within the country is linked to the price of imported crude oil and is revised every month. The new regime has been in place since April 2023.

Price of gas produced from nomination fields of ONGC, OIL at USD 6.50/mmBtu

In the same notification, the government said that price of gas produced from Oil & Natural Gas Corporation’s (ONGC) and Oil India Limited’s (OIL) nomination fields will be subject to a ceiling of USD 6.50/mmBtu.

For the six-month period starting October 1, the price of gas from deep sea and high-pressure, high-temperature (HPHT) areas has been raised to USD 10.16 per mmBtu from USD 9.87 per mmBtu during April-September, another notification said. The increase follows three straight bi-annual reductions in rates for difficult fields.

Two formulae govern the marketing of gas in India. For gas produced from nomination fields of ONGC and OIL, a ceiling price of USD 6.50/mmBtu is in place until the end of this financial year, after which it will increase by USD 0.25/mmBtu every year. For other fields, for instance, those covered under the Production Sharing Contract, the government fixes price every month based on crude oil import prices. These two categories are covered under the new gas pricing regime. The second formula applies to gas produced from deep-water, high-pressure, high-temperature fields, known as difficult fields. The price for difficult area gas continues to be governed by the old formula that takes a one-year average of international LNG prices and rates at some global gas hubs with a lag of one quarter.

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