In response to the softening of benchmark international gas prices, the Indian government has announced a marginal reduction in the price of natural gas produced from difficult areas, including the deep-sea KG-D6 block operated by Reliance Industries.
According to an official notification, the new price stands at USD 9.87 per million British thermal units (mmBtu) for the six-month period starting April 1. This adjustment marks the third consecutive bi-annual reduction in rates for challenging fields, reflecting ongoing efforts to align domestic gas prices with international market trends.
However, it’s noteworthy that the price of gas utilised for CNG (compressed natural gas) used in automobiles and PNG (piped natural gas) supplies for household kitchens remains unchanged. This is due to a price cap regulation, set at 30% below market rates such as those paid to Reliance. The pricing mechanism for natural gas in India operates under two different formulas—one for gas produced from legacy fields of national oil companies like ONGC and Oil India Ltd (OIL), and another for newer fields located in difficult-to-tap areas such as deep-sea reserves. Rates are revised semi-annually, with adjustments made on April 1 and October 1 each year. In line with global market dynamics, the government has been actively adjusting prices to support its vision of transitioning to a gas-based economy. This vision includes increasing the share of natural gas in the primary energy mix to 15% by 2030 from the current level of around 6.3%. By regularly reviewing and adjusting gas prices, India aims to promote investment in domestic production while ensuring affordability and stability in the energy sector.
