As the natural gas prices were declining globally, the government has slashed the price of domestic gas by as much as 26.01% to $2.39 per MMBTU for the April-September period. For the October 2019- March 2020 period, the price of domestic gas was at $3.23 per MMBTU.
This reduction in price of domestic gas shall be beneficial for the power, fertilizers, CNG segment and piped gas connection customers would also benefit from the rate cut.
Also, the center has slashed the maximum price for gas produced from ultra-deep water and high pressure, deep water, and high-temperature areas by 33.45% and is pegged at $5.61 per MMBTU on a gross calorific value basis for April-September period versus the previous pricing of $8.43 per MMBTU for October 2019 to March 2020.
Until February of FY20, domestic gas production in the country stood at 27,931 MMSCM and ONGC ranks as the leading producer producing 21,841 MMSCM of domestic gas. The reduction in price of domestic gas will impact the revenue stream of companies in the domain such as ONGC, OIL as well as joint venture entities.