Consumers brace as natural gas price increases by 16 percent

Consumers brace as natural gas price increases by 16 percent”

The Government has also sharply raised the cap on premium price to $6.3 per mmBtu from $5.56 per mmBtu for the natural gas produced from hard fields, it said in a notification.

This ceiling is also for marketing including pricing freedom for gas to be produced from discoveries in Deepwater, Ultra Deepwater and High pressure-high temperature areas.

"In accordance with New Domestic Natural Gas Pricing Guidelines 2014 issued by MoPNG, the price of domestic natural gas for the period 1 October 2017 to 31 March 2018 is $2.89 per mmbtu on Gross Calorific Value basis", the oil ministry's technical arm PPAC said in a notification.

Mumbai: The government Friday hiked natural gas price by 16.5 per cent to $2.89 per million British thermal unit, the first increase in almost three years that will give relief to producers but raises rates of CNG.

A Bloomberg survey of analysts and industry stated that natural gas prices may be hiked in the range from $2.60 to $3.15.

Between November 2014 - September 2017, the domestic natural gas prices have declined by almost 51%.

After the rise in petrol and diesel prices, consumers are now bracing for the rise of natural gas prices. A price rise would boost profits of producers such as Oil and Natural Gas Corp (ONGC) and Reliance Industries but hurt gas consuming households, drivers and factories.

"Any increase in prices would benefit producers like ONGC", K Ravichandran, Senior Vice President at ratings agency ICRA told ETEnergyWorld. Gail India - who transports this gas - will be among the gainers.

The cap on this price was marginally hiked during the last revision for April-September 2017-18 to $5.56 mmBtu from $5.3 per mmBtu in the preceding half. Companies in power and fertiliser sectors buying natural gas will be impacted negatively. This is done for both gas derived from ordinary fields and gas that is derived from hard fields such as the ones that are located in deep sea or high-pressure high-temperature areas. The price for the period Oct 2017-March 2018 is based on an average of the four benchmark rates between July 2016 and June 2017.

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