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Centre hikes domestic gas prices for May; CNG, PNG prices may remain unchanged
The price of domestic natural gas for May has been set at $8.27 per metric million British thermal units (mmBtu), up from April’s $7.92, as per a notification by the Petroleum Planning and Analysis Cell. This adjustment follows last month’s introduction of a new domestic gas pricing formula.
“The price of domestic natural gas for the period of 1st May 2023 to 31st May 2023 is notified as $8.27 per MMBTU on gross calorific value (GCV) basis,” said the notification dated 30 April.
However, the price revision is not expected to affect piped natural gas (PNG) and compressed natural gas (CNG) prices, as gas produced by state-run ONGC and Oil India from their nomination fields, primarily used for PNG and CNG supplies, will remain at the ceiling price of $6.5 per mmBtu.
“For the gas produced by ONGC/OIL from their nomination fields, the APM shall be subject to a ceiling of $6.5/MMBTU in GCV basis for the same period,” it said.
The Cabinet Committee on Economic Affairs (CCEA) last month approved new gas pricing guidelines, linking domestic natural gas prices in India to global crude prices. Under the guidelines, natural gas prices will be 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.
CCEA also approved a floor price of $4 per mmBtu and a ceiling of $6.50 per mmBtu under the Administered Price Mechanism (APM) gas pricing. The move aims to expand natural gas consumption, increase its share in India’s primary energy mix from 6.5% to 15% by 2030, and reduce the impact of rising international gas prices on Indian prices.
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