The Union Ministry of Petroleum and Natural Gas announced an increase in the price of domestic natural gas for the month of October, marking the second consecutive monthly price hike.
The price has been increased to $9.20 per mmBtu(million British thermal units) from $8.60 per mmBtu in September. The increase in domestic natural gas prices is likely to lead to an increase in the prices paid by consumers for Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) as gas distribution companies may pass on the higher costs.
This price adjustment comes under the new formula which links the domestic natural gas price to current price of the Indian crude basket. The earlier formula was based on the prices of four major global gas trading hubs.
The new pricing mechanism was introduced on the recommendations of an expert committee constituted by the government in October 2022 to align natural gas prices more closely with current market dynamics. Under this new formula, the price of domestic natural gas is adjusted every month.
