Government Cuts Natural Gas Price To $2.48

Natural gas price in India was cut by a marginal $0.02 per million British Thermal Units (mmbtu) for the six month period beginning April 1, news agency Press Trust of India reported. The price of natural gas, used for generating power and making fertilisers and petrochemicals as well as CNG for automobiles, is cut to $2.48 per million British thermal unit for the period from April 1, 2017 to September 30, 2017, from the current $2.5 per mmBtu.

The rate for undeveloped discoveries in difficult areas has been cut to $5.56 from $5.6 per mmBtu currently, Press Trust of India reported.

As per the mechanism approved in October 2014, the price of domestically produced natural gas is to be revised every six months - April 1 and October 1 - using weighted average or rates prevalent in gas-surplus economies at the Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

Rates were last revised on October 1, 2016 when they were cut 18 per cent to $2.5 per mmBtu from $3.06. This was the fourth six-monthly reduction.

Prior to the October cut, rates were reduced 20 per cent to $3.06 from April 1, 2016. The price of gas between October 1, 2015 and March 31, 2016 was $3.81 per mmBtu and $4.66 in the prior six-month period.

(With inputs from PTI)