The Ministry of Petroleum and Natural Gas (MoPNG) has announced a reduction in the domestic natural gas price to $7.29 per million metric British thermal units (mmBtu) on a gross calorific value (GCV) basis for December 2024. This marks a slight decrease from the $7.53 per mmBtu set for November.
Despite this adjustment, the effective domestic gas price for consumers will remain capped at $6.5 per mmBtu, in line with the pricing formula introduced under the new gas pricing mechanism.
“The price of domestic natural gas for the period from December 1 to December 31, 2024, is notified as $7.29/mmBtu on a GCV basis,” stated the ministry in its notification.
The revised pricing structure continues to operate within a pre-established framework, which sets a floor of $4 per mmBtu and a ceiling of $6.5 per mmBtu. November’s price also adhered to the $6.5 per mmBtu cap.
Linked to Imported Crude Pricing
Under the revised regime, domestic gas prices are linked to imported crude oil prices, calculated at 10% of the Indian crude basket. Monthly price revisions ensure alignment with market dynamics and were introduced under MoPNG guidelines issued in April 2023.
The pricing applies to natural gas produced by legacy fields operated by Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Limited (OIL). Key stakeholders, including the Directorate General of Hydrocarbons, ONGC, OIL, and GAIL, have been informed to ensure smooth implementation of the updated pricing structure.
Balancing Producers and Consumers
This pricing adjustment is part of India’s broader strategy to manage its natural gas sector efficiently while balancing the interests of producers and consumers. An industry expert highlighted that the move underscores the government’s efforts to align domestic energy policies with global benchmarks.
“The new pricing framework supports domestic production while ensuring fair pricing for stakeholders. By monitoring global energy trends, India aims to stabilize the natural gas sector and foster sustained growth,” the expert noted.
The monthly revision mechanism reflects India’s commitment to creating a dynamic and resilient energy policy framework that adapts to changing market conditions while promoting economic and environmental sustainability.
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