India will provisionally keep the price of locally produced gas from old fields at $8.57 per million metric British thermal units (mmBtu), the government, while it considers a potential change to the pricing formula.
Under the existing formula, the price was due to go up for April-September, but to ensure fair prices for consumers and that inflation is kept in check the federal government last year set up a panel to review it.
The panel suggested the monthly price of gas from old blocks be fixed at 10% of the monthly average of the Indian crude basket, with a cap of $6.5/mmBtu and a floor price of $4/mmBtu.
The cabinet is expected to consider the recommendation soon.
Keeping gas prices at the current level could hit the earnings of producers such as government-run Oil and Natural Gas Corp. (ONGC) and Oil India Ltd.
Over 80% of India’s yearly gas output of 91 billion cubic metres comes from old fields owned by ONGC and Oil India.
India currently links prices of locally produced gas from old fields to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas. It revises prices twice in a year, in April and October.
However, it added it had lowered the ceiling price of domestic natural gas from difficult fields for April-September to $12.12 per mmBtu from $12.46 per mmBtu.
Tags: Domestic, India, LNG, ONGC
Recent Posts
Vedanta Aluminium signs pact with GAIL for supply of natural gas
HMM introduces South Korea’s first LNG-powered vessels
NGEL inks pact with NREDCAP in Andhra for RE projects
Global warming won’t end if net zero is redefined
The Liberian Registry and Korean Register (KR) grant AiP to Samsung
To satisfy decarbonization targets, Big Oil invests billions in the manufacture of biofuel
ISO issues standards for methanol as a marine fuel
Amazon, partners to test electric trucks on a freight corridor in India