Government hikes domestic natural gas price marginally

Posted on 28 Mar 2018

Tags: O&G

Domestic producers will now sell natural gas at US$3.06 per million British thermal units (mBtu). The price has been hiked marginally from US$2.89 per mBtu.

The price ceiling for gas produced from high temperature areas has also been increased to US$6.78 per mBtu. Petroleum Planning and Analysis Cell said that the revised prices will be effective for April to September 2018 quarter.

The hike is expected to help both public and private sector undertakings in their business. However, analysts believe the government needs to incentivize the sector more.

Currently consumers buy expensive imported Liquefied Natural Gas (LNG). One consignment from US is arriving to India for the first time this Good Friday.

As reported by Busines Line, Dharmendra Pradhan, the Union Minister for Petroleum and Natural Gas in his press meet following his meeting with Texas Governor Greg Abbott said, “India’s oil and gas companies have invested over US$ 5 billion in hydrocarbon assets in the US, and have also contracted 9 million tonne of LNG on a long term basis. A new chapter was added in last October, when the first consignment of crude from the US reached Indian shores. On March 30, the first long-term LNG consignment from the US will reach Dabhol.”

The minister also said that India is in process of overhauling its gas consumption infrastructure to meet the emerging demand.

“After the next round of bids for gas contracts are opened, half of the country will be connected by a city gas grid. Currently there are 92 City Gas Distribution (CGD) contracted areas in India that cover 150 districts. Another 200 districts will be added to this in 2018 alone that will cover 100 CGD areas; this is an indicator of an upcoming gas market in Indi,” he said.

Pradhan said that fertilizer is the primary consumer of gas and power is the secondary consumer. He expected steel sector in eastern India to consume more gas in future.