The price of Natural Gas has been marginally cut to USD 2.48 per MMBtu from USD 2.5.
The price of Natural Gas has been marginally cut to USD 2.48 per mmBtu from USD 2.5. This comes despite rumours of a price rise to USD 2.6-2.68 per mmBtu. If a rise had happened, it would have been the first price rise in 2 and a half years, which includes the KG-D6 field(Reliance Industries) and the other field belonging to ONGC and Oil India. It was also reported that producers of natural gas were looking to revise in the methods to determine the price of natural gas. This would ostensibly provide a little relief to domestic producers who have had to sell natural gas at lower prices due to standardised costs set by the government.
The government in October 2014 had set a price for natural gas which was produced at domestic fields. Although, the government had asked for a revision in every six months in accordance with the price change in the United States (Henry Hub) and the United Kingdom (National Balancing Point), Canada (Alberta) and Russia. The producers are known to revise the price with a half of one-quarter.
Although it is not known for sure, it was expected that the prices would be revised in April-September 2017-18 according to the rates of reference during January-December 2016. It must be noted that the Natural Gas price has been falling in India since the new formula has been applied and had been known to have reduced to less than half of USD 5.05 per mmBtu, which had been fixed in October 2014. In terms of premium price, gas producers are allowed to charge market-based prices within the specified cap for the gas produced at deep offshore fields or high-pressure high-temperature fields, which became operational January 2016 onwards.