Prices of domestic natural gas will now be announced every month, and be pegged at 10 per cent of the international price of the Indian crude basket. The move is expected to reduce by 10 per cent the prices of piped natural gas (PNG), supplied to households, and compressed natural gas (CNG), used as auto fuel and by various industries.
The ceiling price will be set at $6.5 per MMBtu.
He said domestic gas producers would get up to a 20 per cent premium on higher production through reinvestment in nominated fields.
Aimed at expanding the domestic production of natural gas and encouraging technological innovation, the new regime is aimed at balancing the interests of producers and consumers, Minister for Information and Broadcasting Anurag Singh Thakur said. India currently imports 50 per cent of its natural gas requirements.
Global price rise
Thakur pointed to the massive rise in international gas prices as the trigger behind the government’s decision. Pegged to international benchmarks, domestic gas prices had risen from $1.79 per MMBtu on October 1, 2020, to $8.57 per MMBtu on October 1, 2022.
The committee had said India should have a free and market-determined pricing for natural gas extracted from legacy fields and remove all caps by January 1, 2027. The government has not given its decision on this recommendation.
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