There is good news for gas producing companies. There is a possibility of a significant increase in the price of gas this week. Reliance Industries is expected to get $10 per million British thermal unit for KG gas, while state-owned ONGC may get more than double the price for Mumbai High and other areas. The price of natural gas produced in the country is to be reviewed by the government on April 1. Given the rise in energy prices last year, the price of gas produced from fields awarded on nomination basis to Oil and Natural Gas Corporation (ONGC) is expected to rise to $5.93 per million British thermal units (unit) from the current 2.93%. Dollar unit.
According to two sources familiar with the matter, while Reliance and its partner BP Plc’s hard-hit block like D6 operating in the KG basin, the price could range from $9.9-10.1 per unit to $6.13 per unit at present. KG fields operated by Reliance-BP are classified as difficult fields. These rates are the highest ever for regular fields (ONG’s Basai field in Mumbai coastal region) and free market areas like KG Basin.
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Also, this is the second time after April 2019 that rates will go up and the hike is taking place at a time when standard international prices have strengthened. The government fixes rates every six months… on April 1 and October 1. This is determined on the basis of annual average prices released in countries with surplus gas such as the US, Canada and Russia. There is a difference of one quarter. That is, the prices from April 1 to September 30 will be based on the average price of January, 2021 to December, 2021. And during this time the rates have been high.
Sources said that due to the increase in gas prices, the prices of CNG and piped cooking gas (PNG) may go up. At the same time, it will also increase the cost of electricity, but it will not affect the consumers as the amount of electricity generation from gas is not very high. At the same time, it is the first time in six years for the producers that they will get remunerative price.