Daijiworld Media Network - New Delhi
New Delhi, Oct 4: The government has raised the ceiling price of natural gas produced from deepwater, ultra-deepwater and high-pressure, high-temperature fields to $9.89 per million British thermal units (MMBtu) for the six-month period beginning October 1, providing relief to producers operating in technically challenging gas blocks, including Reliance Industries-BP’s KG-D6 project.
The revised ceiling price, up from $8.90 per MMBtu, will remain effective from October 1, 2026, to March 31, 2027, according to a notification issued by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas.
Gas produced from difficult fields enjoys marketing and pricing freedom under the government’s policy framework, but the price remains subject to a ceiling notified by the government.
The increase is expected to support producers developing offshore gas resources, where exploration and production costs are considerably higher than those associated with mature onshore and legacy fields.
However, the government has kept unchanged the price ceiling for natural gas produced from the nomination fields of state-run Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) at $7 per MMBtu.
According to PPAC, the administered price mechanism (APM) gas price for October has been notified at $11.22 per MMBtu. However, the actual realisation for gas produced from the legacy fields of ONGC and OIL will continue to be capped at $7 per MMBtu under the existing pricing regime.
APM gas is supplied primarily to priority sectors such as city gas distribution, fertiliser and power. Its pricing plays a key role in determining input costs for these industries.
The government also allows ONGC and OIL to receive a 10 per cent premium over the prevailing APM gas price for production from new wells drilled in their nomination blocks, subject to the applicable ceiling.
Since the effective APM price for October remains capped at $7 per MMBtu, gas produced from these new wells can be priced at up to $7.70 per MMBtu.