E-Paper
Gas price ceiling for deepwater output slashed by 33% for six months
While the government has freed gas prices from its control, it caps the maximum price any energy producer can change from customers mainly because India’s gas market is yet to mature.
The government has slashed price ceiling for gas produced from deepwater, ultra-deepwater and high pressure-high temperature areas of Indian sedimentary basins by over 33% to $5.61 per unit for the first half of current financial year.
Price ceiling for natural gas produced from other domestic fields have also been reduced by 26% to $2.39 per unit for the first half of current financial year ending September 30, 2020, according to two official notifications. The unit for gas pricing is million metric British thermal unit (mmBtu).
The new gas price ceilings will be applicable for six months from April 1, 2020 to September 30, 2020.
The previous price ceiling applicable from October 1, 2019 to March 31, 2020 for gas produced from deepwater, ultra-deepwater and high pressure-high temperature areas was $8.43 per unit. For rest of the fields it was $3.23 per unit.
While the government has freed gas prices from its control, it caps the maximum price any energy producer can change from customers mainly because India’s gas market is yet to mature.
The gas price ceiling is fixed for six months based on a formula linked with the international energy markets. The formula is linked with the weighted average price of four global benchmarks — the Henry Hub of USA, the Canada-based Alberta gas, the UK-based NBP and the Russian gas.
Price caps have been revised downwardly on March 31 mainly because of a steep fall of energy prices in international oil markets, an oil ministry official aware of the development said.
