Domestic natural gas price kept unchanged at $1.79 per mmBtu for April-Sept

There will be continued pressure on natural gas producers with the government deciding to keep domestic gas price unchanged, at a decade low, for another six months.

A price notification by the Petroleum Planning and Analysis Cell (PPAC), an arm of the Ministry of Petroleum and Natural Gas, said domestically produced natural gas would continue to be sold at $1.79 a million British thermal units (mBtu) from 1 April to 30 September.

According to officials in the know, this price is applicable on more than 90 per cent of domestic natural gas production. In another notification, the maximum sale price allowed to natural gas production from deepwater, ultra deepwater, high pressure and high temperature discoveries was cut from $4.06 per mBtu to $3.62 per mBtu.

While the volume of such gas from ‘difficult’ discoveries is low, it affects companies like Reliance Industries (RIL) which are forced to sell their gas produce at this ceiling price or below. Analysts had expected at least a slight firming up of the gas price for the coming six months. “The price of domestic natural gas being kept unch­anged would mean extended losses for producers like ONGC and Oil India,” an analyst at a domestic rating agency said.

“It was expected that there would be some firming up of the domestic price in line with global cues that reflect in India’s gas pricing approach.”


The price of domestically produced natural gas in India is linked to a formula that takes into account the weighted average of price in global gas hubs. With Covid-19 restrictions easing and demand recovering, the global gas price volatility was expected to push up domestic prices too.

The gas price being kept unchanged is something to cheer for the nearly 7.50 million piped natural gas (PNG) consumers in the country that will continue to get cooking fuel at current rates.

It will also keep costs of public transport through buses and autos in Delhi under check as Compressed Natural Gas is expected to be sold at the same price by Indraprastha Gas.

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