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In an indication that the price of domestically produced natural gas from legacy fields has been kept on hold, as the government mulls over recommendations of the Kirit Parikh committee on fair prices, the Oil Ministry has kept rates of the key commodity unchanged.
The Petroleum Planning and Analysis Cell (PPAC) on Friday said that the price of extracting natural gas from legacy fields, operated by state-run ONGC and Oil India, which is also called Administered Price Mechanism (APM) gas, has been kept unchanged for April-September 2023 period at $8.57 per million British thermal units (mBtu).
However, the price ceiling for gas extracted from difficult fields, or Deepwater, Ultra Deepwater and High Pressure-High Temperature (HPHT) fields, has been cut, albeit marginally, to $12.12 per mBtu for April-September 2023 from $12.46 during October 2022-March 2023 on a gross calorific value (GCV) basis.
“It is informed that the price of domestic natural gas for the period April 1, 2023, to September 30, 2023, shall be notified separately. Further, the price of domestic natural gas notified by PPAC vide communication dated September 30, 2022, which is $8.57 per mBtu on a GCV basis, will continue to be applicable on a provisional basis beyond March 31, 2023, till further order,” PPAC said in its order.
Legacy fields account for more than 70 per cent of the country’s total gas production, which stands at 30,775 million standard cubic meters (MSCM) during April-February FY23. India imports almost 50 per cent of its domestic requirement as liquefied natural gas (LNG).
Sources said that the government is still considering the recommendations of the Kirit Parikh committee on fair pricing of natural gas. The recommendations when accepted will likely come into effect retrospectively from April 1, 2023. The suggestions will require approval from the Cabinet Committee on Economic Affairs (CCEA).
If the Union Cabinet accepts the suggestions of the Parikh committee, the price from old fields will be fixed at 10 per cent of the monthly average of India’s crude oil basket. Besides, this price will also have a floor of $4 per mBtu and a ceiling of $6.5 per mBtu. The panel has recommended not tinkering with natural gas prices produced from HPHT fields such as in KGD6 run by Reliance Industries and BP.
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