The integrated natural gas pipeline tariff of GAIL (India) would be Rs 58.61 per metric million British thermal unit (MMBtu) on a GCV or gross caloric value basis.
The new tariff, which is 45 percent higher than the current tariff, will be effective from April 1, 2023.
This comes after the Petroleum and Natural Gas Regulatory Board (PNGRB), in November 2022, introduced an integrated natural gas pipeline tariff to provide access to natural gas in far-flung areas at competitive and affordable rates.
The Indian government aims to boost the consumption of natural gas in the country and increase its share in the country’s energy basket from 6.2 percent to 15 percent by 2030.
Meanwhile, the spot liquified natural gas (LNG) prices have dropped in the recent period, and almost halved to $14 per metric million MMBtu due to a milder winter and relatively high inventory levels in Europe. This compares to a recent high of $45 per mmBtu.
Weak demand in China, one of the largest consumers of natural gas in the world, due to the strict COVID-19 lockdown has also dragged prices lower.
Brokerage firm CLSA said in a report that Indian city gas distributors such as Gujarat Gas, Indraprastha Gas Limited (IGL) and Mahanagar Gas Limited (MGL) should see stronger margins in the fourth quarter of the current financial year (FY23) with the recent decline in prices.
Indian LNG consumption rebounded by 3.1 percent in January to 65.5 mmscmd (million standard cubic feet per day) compared to the previous month, according to the CLSA report. A 31 percent month-on-month (MoM) cool-off in spot LNG price was to drive a further recovery in February, the report said.Share This