The government increased the prices of domestic natural gas from $8.60/mmBtu (Metric Million British Thermal Unit) to $9.20/mmBtu for the month of October. The Ministry of Petroleum and Natural Gas issued a notification on Saturday, informing that the price of Domestic Natural Gas has been increased for the period between October 1, 2023, and October 31, 2023.
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This is likely to impact the consumers as gas distribution companies may increase the prices of CNG and PNG.
The price of domestic natural gas increased for the second consecutive month. In September, the prices increased from $7.85/mmBtu to $8.60/mmBtu. Now, the prices for October have been increased from $8.60/mmBtu to $9.20/mmBtu, CNBC Awaaz reported on Saturday.
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Under the new formula, the price of domestic natural gas is now decided on the basis of the price of Indian crude basket. Earlier, the price of domestic natural gas was decided on the basis of the price of four big gas trading hubs of the world – Henry Hub, Albany, National Balancing Point (UK) and Russian gas.
The gas price is now fixed every month, whereas under the old formula the price of gas was fixed every 6 months, the report said.
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As per the new formula, the price of domestic natural gas is based on the price of the Indian Crude Basket in the last month. Under the old formula, the average of the price of the last one year (value weighted price) of the four gas trading hubs of the world was calculated and then it was implemented at an interval of three months.
The government had formed a committee in October 2022 to decide the new formula. The government has prepared this formula on the basis of the recommendations of the committee.
