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Domestic natural gas price kept unchanged at $1.79 per mmBtu for April-Sept According to officials in the know, this price is applicable on more than 90 per cent of domestic natural gas production
There will be continued pressure on natural gas producers with the government deciding to keep the domestic gas prices unchanged, at a decade low, for another six months. A price notification by the Petroleum Planning and Analysis Cell (PPAC), an arm of the Ministry of Petroleum and Natural Gas, said domestically produced natural gas would continue to be sold at $1.79 a million British thermal units (mBtu) from 1 April to 30 September. According to officials in the know, this price is applicable to more than 90 percent of domestic natural gas production. In another notification, the maximum sale price allowed to natural gas production from deepwater, ultra-deepwater, high pressure and high-temperature discoveries was cut from $4.06 per mBtu to $3.62 per mBtu. While the volume of such gas from ‘difficult’ discoveries is low, it affects companies like Reliance Industries (RIL) which are forced to sell their gas produce at this ceiling price or below. Analysts had expected at least a slight firming up of the gas price for the coming six months. “The price of domestic natural gas being kept unchanged would mean extended losses for producers like ONGC and Oil India,” an analyst at a domestic rating agency said. “It was expected that there would be some firming up of the domestic price in line with global cues that reflect in India’s gas pricing approach."