New Delhi: The government has more than doubled the price of domestically produced natural gas amid a rise in fuel prices globally. The new price will be applicable from April 1 to September 30, 2022.
According to the notification issued on Thursday by the Petroleum Planning and Analysis Cell (PPAC) under the Petroleum Ministry, the price of gas produced from the regular fields of public sector ONGC and Oil India is $ 2.90 per million British thermal unit (mmBtu). Unit(s) has been increased to $6.10 per million mmBtu.
For fields located in difficult areas such as deepwater areas, the price has been increased to $9.92 per unit from $6.13 per unit so far. The new domestic natural gas price announced for April to September 2022 is the highest since 2014.
After the increase in the price of natural gas, the prices of CNG and PNG in the country may increase further. This is because both these fuels are made from natural gas. Natural gas is used for power generation, making fertilizers, CNG and domestic cooking for cooking.
With the increase in the price of natural gas, the cost of power generation will increase, hence it will increase the electricity rates. However, this is unlikely to have much impact on the customers as very little electricity is being generated from natural gas at present. But fertilizer can be expensive.
Prashant Vasisht, Vice President and Co-Head, Corporate Ratings, ICRA Ltd, said: “The domestic gas price increase was driven by the significant run up in the prices of gas at global gas hubs. The increase in gas prices provides relief to Indian upstream producers as at earlier prices, gas production was a loss-making proposition for most fields for the Indian upstream producers.”
Natural gas prices change every 6 months. The government had raised the price of natural gas by 62 per cent to $2.90 mmbtu (mmbtu – metric million British thermal units) for the October 2021-March 2022 half. For the April-September 2021 half, the price was $1.79 per mmBtu.
(With PTI inputs)