GAIL Gas Blends Prices to Offset Rising LNG Costs

GAIL Gas, a unit of GAIL (India), is finding ways to keep industrial gas prices affordable for its customers amidst rising global fuel prices. According to CEO Ashu Shinghal, the company is using a mix of differently priced natural gas supplies and contractual flexibility to achieve this goal.

The recent surge in oil and gas prices has weighed on consumption. Brent crude traded around $105 a barrel on Friday, while JKM, the Asian spot LNG benchmark, was near $25 per mmbtu. Industrial and commercial customers are entirely dependent on imported gas, making them particularly exposed to the rise in international prices.

GAIL Gas is offering industrial customers a blended price for up to 80% of their contracted volumes. Additional volumes are priced at international spot rates, which are higher than the blended price. Shinghal said sales to its industrial customers are currently about 10% below last year's levels.