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Domestic natural gas prices cut almost 20%
Domestic natural gas prices will be almost 20 per cent cheaper in the April-September 2016 period. The price for the period will be $3.06 per million British thermal unit on a gross calorific value basis. The government also announced the price cap of $ 6.61 per mBtu on a gross calorific value basis for natural gas from deepwater, ultra deepwater and high temperature high pressure areas.
Earlier in March, the government approved pricing and marketing freedom for natural gas produced from such difficult areas. However, the pricing freedom is subject to a price cap which is determined by the lowest among landed cost of imported fuel oil, weighted average of imported fuel oil, imported coal and imported LNG or the landed cost of imported LNG. The price ceiling will be applicable from April-September 2016 before it is revised again.
The domestic natural gas price is as per a formula approved by the government in September 2014 In the September 2015-March 2016 period the price of domestic natural gas was $3.82 per mBtu on a gross calorific value basis.
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