India Boosts Deepwater Gas Price Ceiling to 9.89 Dollars per MMBtu
India has raised the ceiling price for natural gas extracted from deepwater, ultra-deepwater, and high-pressure, high-temperature fields to 9.89 dollars per million British thermal units (MMBtu). This adjustment, effective from 1 October 2026 to 31 March 2027, aims to support capital-intensive offshore projects. The Petroleum Planning and Analysis Cell (PPAC), under the Ministry of Petroleum and Natural Gas, announced the change in a notification dated 30 September 2026. The new ceiling replaces the previous limit of 8.90 dollars per MMBtu, as confirmed by PPAC data.
The pricing shift benefits producers like the Reliance Industries and BP joint venture at the KG-D6 block, allowing them to contract output up to the new ceiling. This move is intended to enhance revenue prospects for technically challenging fields where extraction costs surpass those of mature onshore operations. The pricing applies on a gross calorific value basis but does not guarantee automatic invoicing at the ceiling price, as actual prices depend on contracts, market demand, and negotiations.
Legacy nomination fields managed by the Oil and Natural Gas Corporation (ONGC) and Oil India Limited remain subject to a separate administered price mechanism cap of 7 dollars per MMBtu. Despite the official formula price reaching 11.22 dollars in October 2026, priority sectors like city gas, fertilizer, and power companies continue to receive gas at the 7-dollar limit. New wells in these legacy blocks may earn a 10 percent premium, capping their earnings at 7.70 dollars per MMBtu.
The PPAC has clearly distinguished the pricing paths for these two types of gas production. The difficult-field ceiling remains fixed until 31 March 2027, while monthly updates for the domestic formula price will continue. Any changes to tariffs for industrial consumers or city gas users will be determined through subsequent regulatory filings.