Reflecting a rise in worldwide costs, the Central Government more than doubled the price of locally generated natural gas for the six months commencing today (1 April).
The revised pricings were published today by the federal oil ministry’s Petroleum Planning and Analysis Cell.
This will hike gas costs for consumers, the power sector, factories, and fertiliser companies, contributing to overall inflation.
The price of gas from controlled fields of state-owned Oil and Natural Gas Corp Ltd and Oil India Ltd would climb to a record $6.10 per million British thermal unit from the current $2.90, according to a notification published by the oil ministry’s PPAC.
According to the announcement, the rate paid for problematic fields like deepwater would increase to $9.92 per mmBtu from $6.13 per mmBtu from April to September.
Prices of locally generated gas from historic fields in India are linked to a formula based on worldwide benchmarks such as Henry Hub, Alberta gas, NBP, and Russian gas.
ONGC, Oil India Ltd, and Reliance Industries would benefit from higher natural gas prices.
In February, India’s annual retail inflation surpassed 6% for the second month in a row.
Fuel merchants began a gradual hike in pump prices of gasoil and gasoline on March 21, following a four-month hiatus, mirroring a jump in worldwide costs.
According to DBS Bank, a $10 increase in the price of a barrel of oil raises India’s consumer price index-based inflation by 20 to 25 basis points, widens the current account deficit by 0.3 percent of GDP, and puts the country’s growth at risk by 15 basis points.
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