Government Cuts Natural Gas Price To Multi-Year Low

Lower natural gas prices mean reduced costs for gas for fertilisers, automobiles and households.

Government Cuts Natural Gas Price To Multi-Year Low

The country began linking local rates to a formula tied to global benchmarks in 2014

New Delhi:

The government has cut the price of locally produced gas for October 2020-March 2021 by about a quarter to a multi-year low of $1.79 per million metric British thermal units (mmBtu), it said on Wednesday.

This would be the lowest price since 2014, when the country began linking local rates to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas.

It also set the ceiling price for gas produced from more challenging fields at $4.06 per mmBtu for the same period, down 27.6 per cent from the prior six-month period, the statement showed.

The prices will be applicable on a gross heat value basis.

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Lower natural gas prices mean reduced costs for gas for fertilisers, automobiles and households.

They will also cut earnings for state-owned Oil and Natural Gas Corp (ONGC) and Oil India.