According to the recently authorised revised pricing formula, the government declared on March 7 that natural gas prices would be USD 7.92 per unit for the balance of April, while consumer prices would be regulated at USD 6.5 per unit.
According to a directive from the Petroleum Planning and Analysis Cell of the Oil Ministry, the price of natural gas from April 8 to April 30 would be USD 7.92 per million British thermal units under the new indexation that will price it at 10% of the cost of crude oil imports. Although revising the price methodology, the Union Cabinet did limit the tariffs at USD 6.5 per mmBtu for the two years ending March 31, 2025. According to the ruling, “the price must be subject to a limit of USD 6.5 per mmBtu for the gas generated by ONGC/OIL from their nominated fields.”
The capped rates, which are around a quarter cheaper than the present costs, will result in price reductions of up to 10% for CNG and piped cooking gas. As a result of the decision, Delhi’s prices for CNG and PNG are projected to drop from Rs. 79.56 per kilogramme to Rs. 73.59 and Rs. 53.59 per thousand cubic metres to Rs. 47.59, respectively. CNG may cost Rs 79 per kg in Mumbai rather than Rs 87, while PNG may cost Rs 49 per scm as opposed to Rs 54.
On Thursday, the Government adopted a number of significant suggestions made by the Kirit Parikh Committee regarding the cost of natural gas generated from APM fields (that are legacy fields and largely held by PSUs like ONGC). Petrol prices would be based on 10% of India’s average monthly crude import basket under the new pricing structure.