BackNatural gas prices to be cut by 10% to $5.02 per unit from 1 April
On a gross-calorific value basis, the price will be around $4.67 per mmBtu as compared with $5.05 currently
Premium
New Delhi: Domestic natural gas prices are likely to be slashed by over 10% to $5.02 per unit from 1 April, hitting revenues of companies such as Oil and Natural Gas Corp. Ltd (ONGC) and Reliance Industries Ltd (RIL).
The prices of natural gas are due to be revised from 1 April, based on average rates at key international hubs. The new rate will be around $5.02 per million British thermal unit (mmBtu) compared with the current price of $5.61, sources privy to the development said. On a gross-calorific value basis, the price will be around $4.67 per mmBtu as compared with $5.05 currently.
The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government had in October 2014 used a new formula to fix price of almost all domestically produced natural gas at $5.61 per mmBtu for the period up to 31 March. Rates for next six months are to be decided based on one-year average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter. So, rate for 1 April to 30 September would be based on an average price at the international hubs during January to December 2014.
Sources said the oil ministry is likely to announce the new rates sometime this week.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
