India Cuts Domestic Gas Price by 25%
India has slashed the regulated wholesale price of locally produced natural gas by around 25% with effect from October 1, the Indian oil ministry's Petroleum Planning and Analysis Cell (PPAC) said on September 30 in a statement.
For the October 1-March 31 period, the price paid to most domestic natural gas producers will decrease to $1.79/mn Btu from $2.39/mn Btu during the April 1-September 30 period. The current price is the lowest in almost a decade. The price of locally-produced gas is set every six months.
Also, the ceiling price for gas from difficult fields such as deep water, ultra-deep water and high pressure-high temperature areas was reduced by 28% to $4.06/mn Btu, PPAC said.
India’s domestic gas production has been stagnant in recent years and low prices have played a key role in that. To meet the demand shortfall, the south Asian nation imports LNG from producers such as Qatar, Russia, Australia and the US. India’s import dependency has consistently remained around 50%.
According to media reports published earlier this week, in order to boost local production the government is considering a proposal of a floor price for gas that is regulated.