New Delhi: The Indian government on Wednesday cut natural gas prices by 16% to USD 4.24 per unit for the six month period, beginning October 1. On gross calorific value (GCV) basis, the new gas price for October 1 to March 31 would be USD 3.82 per mmBtu as compared to USD 4.66 currently, officials said.
As the price of natural gas plummets in international market, government reduced the natural gas prices. The price cut is the second reduction in rates ever – the first being on April 1. While the cut will impact the revenue of producers like Oil and Natural Gas Corp (ONGC) and Reliance Industries, it will bring gains for users in the power and fertilizer sector.
As per the mechanism approved in October 2014, price of domestically produced natural gas is to be revised every six months using weighted average or rates prevalent in gas-surplus economies of US/Mexico, Canada and Russia to incentivize exploration in deep-sea that wasn’t viable at USD 4.2 rate. .