-
Natural gas price slashed to $7.82 per mmBtu for January
The government has lowered the price of domestic natural gas for January to $7.82 per million British thermal units (mmBtu) from $8.47 per mmBtu last month. This marks the lowest domestic gas price since July 2023 and reflects a continued downward trend since August 2023.
The price revision would be applicable on gas produced from difficult fields, operated by private players. However, the price of gas from the nomination fields of state-run ONGC and Oil India remained unchanged at the capped price of $6.5 per mmBtu.
Nomination fields are areas the government granted to state-run ONGC and Oil India before 1999, when auctions became the basis for awarding oil and gas blocks.
Considering that the city gas distribution (CGD) sector, the largest consumer of natural gas, including piped natural gas, and compressed natural gas), receives top priority in gas procurement from nominated legacy fields, this decline in the price of difficult fields may help sectors such as fertilizers and gas-based power plants.
Since April last year, after the union cabinet approved the new gas pricing regime, domestic natural gas prices have been linked to the Indian crude oil basket. The new guidelines were recommended by the Kirit Parikh-led committee on natural gas pricing, paving the way for linking domestic natural gas prices in India to global crude prices.
Following the change, the price of natural gas is calculated at 10% of the monthly average of the Indian crude basket, which is a weighted average of Dubai and Oman (sour) and Brent Crude (sweet) oil prices.
The decline in gas prices comes amid the cooling down of global crude prices. The Indian basket of crude oil averaged at $77.42 per barrel in December, against $83.46 per barrel in November.
The March contract of Brent on the Intercontinental Exchange closed at $71.65 per barrel on Friday lower by 0.17% from its previous close. The February contract of West Texas Intermediate (WTI) on the NYMEX fell 0.17% to $71.65 a barrel on Friday.
Share This
