The government has fixed a price of $9.20 per million British thermal units (mBtu) for the natural gas produced from the legacy fields of ONGC and Oil India for October 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 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.

Previously, the price of gas from legacy fields and 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.

The new pricing formula was approved by the Union Cabinet in April 2023 after the Kirit Parikh committee on fair pricing of gas submitted its report to the Ministry of Petroleum & Natural Gas (MoPNG).

Subsequently, the government revised the price of natural gas under the administered price mechanism (APM) at $7.92 per mBtu for April 8 to April 30.

During May, June and July, APM gas prices were fixed at $8.27 per mBtu, $7.58 per mBtu and $7.48 per mBtu, respectively.

August 2023 and September 2023 were fixed at $7.85 per mBtu and $8.60 per mBtu, respectively.

Natural gas is used as a feedstock in several industries, with major consumers being fertilisers (32 per cent), City Gas Distribution (20 per cent), Power (15 per cent), Refinery (8 per cent) and Petrochemicals (5 per cent).