Govt hikes domestic natural gas price to $9.20/mmBtu, new rate in effect from Oct 1
increased from $7.85 to $8.60. The hike is expected to affect end-consumers, as city gas distribution companies are likely to accordingly raise the prices of compressed natural gas (CNG) as well the piped natural gas (PNG), commonly referred to as the cooking gas.
Exciting news! Mint is now on WhatsApp Channels. Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here! Notably, the revision in natural gas prices is undertaken on per-month basis, as per the new formula adopted by the government.
As per the formula, the price is determined on the basis of Indian crude basket rates of the preceding month. This differs from the earlier method of arriving at a price after factoring the average price in the last one year of the world's four big gas trading hubs – National Balancing Point (UK), Russian Gas, Henry Hub and Albany.
The domestic rate, under this method, was fixed for a six-month period. The old formula was discarded after the government had formed a committee in October last year to suggest a method of ascertaining the domestic prices.
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