Government raises ceiling price of gas from deep-sea fields to $9.89 per MMBtu
The petroleum ministry has raised the maximum price of gas from deep, ultra-deep and high-pressure high-temperature areas, which may affect CNG and PNG costs.
Amid rising prices, the government has also raised the maximum price of natural gas. Talk of further increases in petrol and diesel prices has been going on for some time, and the gas price rise could add to the worries of the common man.
The Ministry of Petroleum and Natural Gas has raised the maximum price of gas produced from deep, ultra-deep and high-pressure high-temperature areas from $8.90 per MMBtu to $9.89. In Indian rupees, this works out to roughly Rs 930 per MMBtu rising to roughly Rs 1,030 per MMBtu.
The increase applies to the maximum price of gas produced in difficult and deep-sea areas. The new prices will come into force on October 1, 2026, and will run for the next six months, until March 31, 2027.
The change will apply in particular to gas fields where the cost of extraction is higher than in conventional areas. Companies that produce gas from difficult offshore areas may also benefit. Blocks such as KG-D6 in the Krishna-Godavari basin come under this arrangement.
The question now is what the effect on CNG and PNG will be. Natural gas is used to supply CNG and PNG to cities. It is also an important raw material for making fertiliser and generating power. A change in the price of domestically produced gas could therefore affect the cost of gas in all these uses.
However, a rise in the maximum gas price alone does not necessarily mean CNG and PNG prices will go up immediately in proportion.
In India, natural gas is used as CNG in vehicles, as PNG in homes, and in power and fertiliser production. The higher price could therefore affect CNG and PNG supply, fertiliser production, power generation and city gas distribution.
