New Delhi: The price of gas from old domestic fields hiked by 40 percent to $8.57/MMBtu from $6.1/MMBtu, according to the order issued by Petroleum Planning & Analysis Cell on Friday.
The price of domestic natural gas for the six months starting April 1 has been fixed at $6.10 per million British thermal unit (mmBtu) from $2.90 per mmBtu for the second half of FY22. This price will be applicable for the regulated gas fields of state-run majors ONGC and Oil India Ltd.
The rise in prices comes on the back of increase in global energy prices amid Russia Ukraine crisis.
“In accordance with Para 8 of the “New Domestic Natural Gas Pricing Guidelines, 2014“ issued by Ministry of Petroleum and Natural Gas, Govt. of India, the price of Domestic Natural Gas for the period 1st October 2022 to 31 March 2023 is $8.57/MMBTU on Gross Calorific Value (GCV) basis,” according to an order from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC).
Simultaneously, the price of gas from deepwater, ultra deepwater and high pressure-high temperature areas like the ones in Reliance Industries Ltd and its partner bp plc operated deepsea D6 block in KG basin, was hiked to $12.6 per mmBtu from $9.92
“In accordance with Ministry of Petroleum and Natural Gas, Govt. of India, Notification No. O-22013/27/2012-ONG-D-V (Vol-II) dated 21.03.2016 for marketing including pricing freedom for gas being produced from discoveries in Deepwater, Ultra Deepwater and High Pressure-High Temperature areas, the gas price ceiling for the period 1st October, 2022 31st March, 2023 is $12.46/MMBTU on Gross Calorific Value (GCV) basis,” the order reads.
Also, this will be the third increase in rates since April 2019 and comes on the back of firming benchmark international prices.
The government sets the price of gas every six months, on 1 April and 1 October, each year based on global rates.
So, the price for 1 October to 31 March, is based on the average price from July 2021 to June 2022. This is the period when global rates shot through the roof.
The rise in natural gas price is likely to lead to further increase in piped natural gas, CNG and LPG prices which will further impact the budget of the common man. Inflation rates which are already very high will continue its northward movement with the hike in gas prices.
Recently, the India’s retail inflation inched up to 7% in August from 6.71% in July mainly due to higher food prices, as per the government data showed. The consumer price index-based inflation is above the Reserve Bank’s comfort level of 6% for the eighth month in a row.
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