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Govt Cuts Domestic Natural Gas Prices to $7.29 Per MmBtu for Dec
OIL & GAS

Govt Cuts Domestic Natural Gas Prices to $7.29 Per MmBtu for Dec

The oil ministry announced in a notification that the price of domestic natural gas for December has been reduced to $7.29 per million metric British thermal units (mmBtu), down from $7.53 in the previous month. However, the domestic natural gas price will remain at $6.5 for the month, as per the formula used for the calculation of prices.

The notification stated that the price of domestic natural gas from December 1, 2024, to December 31, 2024, is set at $7.29/mmBtu on a gross calorific value (GCV) basis.

Under the new gas pricing mechanism, domestic gas prices are now subject to a floor and ceiling of $4 per mmBtu and $6.5 per mmBtu, respectively. The price had been $6.5 per mmBtu in November as well.

The price applies to natural gas produced from the legacy and oil fields of Oil and Natural Gas Corporation (ONGC) and Oil India (OIL). Under the new pricing regime, domestic gas pricing is linked to imported crude pricing, set at 10 per cent of the Indian crude basket. The prices are revised every month.

This pricing decision is part of India's on-going efforts to manage its natural gas sector effectively while balancing the needs of producers and consumers. The new price follows the guidelines set forth by the MoPNG's notification in April 2023, which established the framework for monthly price updates.

Key stakeholders, including the Directorate General of Hydrocarbons, ONGC, OIL, and GAIL, have been informed of the new pricing structure to ensure a coordinated approach in managing the country’s natural gas sector.

An expert explained that the new pricing reflects India’s efforts to align its energy policies with global standards, while supporting domestic production and ensuring fair pricing for all stakeholders. The government's monitoring of global energy markets, combined with its policy framework, aims to stabilise pricing and maintain growth in the country’s natural gas sector.

The oil ministry announced in a notification that the price of domestic natural gas for December has been reduced to $7.29 per million metric British thermal units (mmBtu), down from $7.53 in the previous month. However, the domestic natural gas price will remain at $6.5 for the month, as per the formula used for the calculation of prices. The notification stated that the price of domestic natural gas from December 1, 2024, to December 31, 2024, is set at $7.29/mmBtu on a gross calorific value (GCV) basis. Under the new gas pricing mechanism, domestic gas prices are now subject to a floor and ceiling of $4 per mmBtu and $6.5 per mmBtu, respectively. The price had been $6.5 per mmBtu in November as well. The price applies to natural gas produced from the legacy and oil fields of Oil and Natural Gas Corporation (ONGC) and Oil India (OIL). Under the new pricing regime, domestic gas pricing is linked to imported crude pricing, set at 10 per cent of the Indian crude basket. The prices are revised every month. This pricing decision is part of India's on-going efforts to manage its natural gas sector effectively while balancing the needs of producers and consumers. The new price follows the guidelines set forth by the MoPNG's notification in April 2023, which established the framework for monthly price updates. Key stakeholders, including the Directorate General of Hydrocarbons, ONGC, OIL, and GAIL, have been informed of the new pricing structure to ensure a coordinated approach in managing the country’s natural gas sector. An expert explained that the new pricing reflects India’s efforts to align its energy policies with global standards, while supporting domestic production and ensuring fair pricing for all stakeholders. The government's monitoring of global energy markets, combined with its policy framework, aims to stabilise pricing and maintain growth in the country’s natural gas sector.

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