The Ministry of Petroleum and Natural Gas (MoPNG) has revised the price of gas produced from the legacy fields of ONGC and Oil India Limited by more than 4 per cent MoM to $8.27 per mBtu for May 2023.

However, the Petroleum Planning and Analysis Cell (PPAC) said that the price from the nomination fields of both the Oil PSUs will be subject to a ceiling of $6.50 per million British Thermal Units (mBtu).

Under the new pricing formula, the prices for natural gas will be revised monthly, from the 26th of the previous month to the 25th of the current month.

Following the Cabinet’s approval of the Kirit Parikh committee recommendations last month, the government revised the price of natural gas under the administered price mechanism (APM) at $7.92 per mBtu for April.

The prices were revised for two time periods—from April 1 to April 7 and another from April 8 to April 30. For the April 1 to 7 period, the Petroleum Planning And Analysis Cell (PPAC) said the price of gas on a GCV basis will be $9.16 per mBtu. Legacy fields account for 70 per cent of the gas produced in the country.

Previously, the price of gas from legacy fields and from difficult fields, or Deepwater, Ultra-Deepwater, and High Pressure-High Temperature (HPHT) fields were revised bi-annually, with effect from April 1 and October 1.

Also read: ONGC to drill for oil & gas in Cauvery ultra deep waters in FY24

The Ministry of Petroleum and Natural Gas (MoPNG) said the new guidelines are intended to ensure a stable pricing regime for domestic gas consumers, while at the same time, providing adequate protection to producers from adverse market fluctuation with incentives for enhancing production.

The reforms will lead to a significant decrease in prices of Piped Natural Gas (PNG) for households and Compressed Natural Gas (CNG) for transport. The reduced prices shall also lower the fertiliser subsidy burden and help the domestic power sector.

Commercial LPG

In a separate development, the oil marketing companies (OMCs) revised the price of commercial LPG on May 1. The rates have been slashed by ₹171.5 per 19kg in line with a softening in the international prices of natural gas.

A 19-kg commercial LPG cylinder now costs ₹1,856.5 in Delhi. This is the second straight cut in rates, when the rates were slashed by ₹91.5 per 19-kg cylinder on April 1. On March 1, 2023, the prices were raised by ₹350.50.