The oil ministry has announced an increase in the price of domestic natural gas to $8.17 per million metric British thermal units (mmBtu) for March, up from $7.85 in the previous month, according to a notification.
However, the domestic natural gas price will remain unchanged at $6.5 for the month, following the established formula for price calculation.
Under the updated gas pricing mechanism, domestic gas prices are now subject to a floor and ceiling of $4 per mmBtu and $6.5 per mmBtu, respectively. This pricing structure has been consistent since January and February when the price stood at $6.5 per mmBtu.
The government-notified domestic gas price applies to natural gas extracted from the legacy and oil fields operated by Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Limited (OIL).
Implemented as per the new pricing regime, domestic gas pricing is linked to the price of imported crude oil, set at 10 percent of the Indian crude basket. These prices are subject to monthly revisions. The shift to this new pricing formula was initiated following recommendations from a government-appointed panel chaired by energy expert and former Planning Commission member Kirit Parikh. The objective is to shield domestic players and consumers from the fluctuations in global markets.
