- By Imran Zafar
- Sat, 30 Sep 2023 05:40 PM (IST)
- Source:JND
The price of domestic natural gas has been increased by the Union Ministry of Petroleum and Natural Gas to USD 9.20 (Rs 765.23) per mmBtu from USD 8.60 (Rs 715.33) per mmBtu for October, following a new formula that links the price to the current price of the Indian crude basket.
This is the second consecutive monthly price hike, which is likely to affect the consumers of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) as gas distribution companies may pass on the higher costs.
The new pricing mechanism was introduced in October 2022 on the recommendations of an expert committee constituted by the government to align natural gas prices more closely with current market dynamics. The earlier formula was based on the prices of four major global gas trading hubs.
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The price of domestic natural gas is adjusted every month under the new pricing mechanism for natural gas in the country. At the time of its initiation, the Centra stated that new guidelines were mandatory to ensure a stable pricing regime for domestic gas consumers while at the same time providing adequate protection to producers from adverse market fluctuation with incentives for enhancing production.