new Delhi: The government has more than doubled the price of domestically produced natural gas amid rising fuel prices globally. The new price will be applicable from 1st April to 30th September 2022.
According to a 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). The unit(s) has been increased to $6.10 per million mmBtu.
For farms located in difficult areas such as deep water areas, the price has been increased from $6.13 per unit so far to $9.92 per unit. The new domestic natural gas price announced for April to September 2022 is the highest since 2014.
With 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, fertilizer making, CNG and for domestic cooking for cooking.
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A rise in the price of natural gas will increase the cost of electricity generation, hence increasing electricity rates. However, this is unlikely to have much impact on customers as very little electricity is currently being generated from natural gas. But fertilizer can be expensive.
Prashant Vashisht, Vice President and Co-Head of Corporate Ratings, ICRA Ltd., said: “The rise in domestic gas prices was driven by a significant increase in gas prices across global gas hubs. The rise in gas prices brings relief to Indian upstream At earlier prices for producers, gas production was a loss-making deal for most sectors for 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 for the October 2021-March 2022 half-year. The price for the April-September 2021 half stood at $1.79 per mmBtu.
(with PTI inputs)