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India raises local gas price from oil fields by 4%
India has increased the price of locally produced gas from oil fields by almost 4% to $6.75 per million metric British thermal units (mmBtu) for April, as compared to the previous month’s price of $6.50 per mmBtu, according to a government website update on Monday.
This is the first adjustment in two years for the price of gas extracted from older fields. In 2023, the Indian government had established a maximum price of $6.50 per mmBtu for a period of two years. This cap included a provision for an annual increase of 25 cents from the third year onwards.
Additionally, the ceiling price for gas to be extracted from challenging fields has been set at $10.04 per mmBtu for the period from April to September. This is a slight decrease from the previous six months’ ceiling price of $10.16 per mmBtu, as shown by the Petroleum Planning and Analysis Cell of the oil ministry’s website.
These prices will be used on a gross heat value basis.
The increase in the price of gas produced from oil fields will result in higher earnings for the Oil and Natural Gas Corp (NSE:ONGC) and Oil India (NSE:OILI). However, it will also lead to an increase in prices for industrial buyers and companies in the fertilizer and city gas distribution sectors.
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