Following the Cabinet’s approval of the Kirit Parikh committee recommendations, the government on Friday revised the price of natural gas produced from legacy fields of ONGC and OIL at $7.92 per mBtu with effect from Saturday.

The prices have been revised for two time periods — from April 1, 2023 to April 7 as well as another from April 8 to April 30. Legacy fields account for 70 per cent of the gas produced in the country.

“The price of domestic natural gas for April 8-30 is notified as $7.92 per million British thermal units (mBtu) on a gross calorific basis (GCV). Further, for the gas produced by ONGC/ Oil India (OIL) from their nomination fields, the above mentioned APM price shall be subject to a ceiling of $6.50 per mBtu on GCV basis for the same period,” PPAC said in a notification.

For the April 1-7 period, the Petroleum Planning And Analysis Cell (PPAC) said the price of gas on a GCV basis will be $9.16 per mBtu.

Sources said that initially the price of domestically-produced natural gas will be higher but will come down in a few months. After the new notification, the prices will be revised monthly, from 26th of the previous month to 25th of the current month.

On Thursday, the government approved the Parikh committee recommendation, which proposed a ceiling of $6.50 per mBtu and a floor of $4 per mBtu. Besides, the price from old fields will be fixed at 10 per cent of the monthly average of India’s crude oil basket.

Previously, the price of gas from legacy or Administered Price Mechanism (APM), 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.

The Ministry of Petroleum & 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 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 fertilizer subsidy burden and help the domestic power sector, it added.