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Domestic natural gas prices are likely to be slashed by over 10 per cent to $5.02 per unit from April 1, hitting the revenues of companies such as ONGC and Reliance Industries.
The prices of natural gas are due to be revised from April 1, based on the average rates at key international hubs. The new rate will be around $5.02 per million British thermal unit (mmBtu) as compared to the current price of $5.61, sources privy to the development said.
On a gross-calorific value basis, the price will be around $4.67 per mmBtu as compared to $5.05 currently.
The BJP-led NDA government had in October 2014 used a new formula to fix the price of almost all domestically produced natural gas at $5.61 per mmBtu for the period up to March 31.
Rates for the next six months are to be decided based on the one-year average price at the Henry Hub of the US, the National Balancing Point of the UK, rates in Alberta (Canada), and Russia with a lag of one quarter.
So, the rate for April 1 to September 30 would be based on the average price at the international hubs during January to December 2014.
Sources said the Oil Ministry is likely to announce the new rates sometime this week.
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