The government on March7 announced a natural gas price of USD 7.92 per unit for the remainder of April according to the just approved new pricing formula, but rates for consumers have been capped at USD 6.5 per unit.

As per an order of the Oil Ministry's Petroleum Planning and Analysis Cell, the price of natural gas for April 8 to April 30 period comes to USD 7.92 per million British thermal unit going by the new indexation of pricing it at 10 per cent of imported cost of crude oil. However, the Union Cabinet had while changing the pricing formula capped the rates at USD 6.5 per mmBtu for two years ending March 31, 2025. "For the gas produced by ONGC/OIL from their nomination fields, the price shall be subject to ceiling of USD 6.5 per mmBtu," the order said.

The capped rates which are about a quarter less than the current prices, will lead to CNG and piped cooking gas prices being cut by up to 10%. Following the decision, the CNG price in Delhi is likely to be cut from Rs 79.56 per kg to Rs 73.59 and that of PNG from Rs 53.59 per thousand cubic meters to Rs 47.59. In Mumbai, CNG may cost Rs 79 per kg instead of Rs 87 and PNG may cost Rs 49 per scm instead of Rs 54.

The Government on Thursday accepted several key recommendations made by the Kirit Parikh Committee with respect to the pricing of natural gas produced from APM fields (that are legacy fields and largely held by PSUs like ONGC). Under the new pricing mechanism, the pricing of gas will be linked to 10% of India's average monthly crude import basket.

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