India raises deep-water gas price ceiling to USD 9.89 per MMBtu
The Indian Ministry of Petroleum and Natural Gas has raised the price ceiling for natural gas extracted from deep-water, ultra-deep-water, and high-pressure-high-temperature (HP-HT) fields. The new ceiling is set at USD 9.89 per million British thermal units (MMBtu), up from the previous USD 8.90 per MMBtu. In rupee terms, this marks an increase from approximately Rs 930 to Rs 1,030 per MMBtu. The revised pricing will take effect from October 1, 2026, and remain in place until March 31, 2027.
This pricing framework specifically applies to offshore fields where extraction costs are notably higher than conventional fields. Notable production blocks like KG-D6 in the Krishna-Godavari basin fall under this mechanism. The higher ceiling is designed to offer better pricing flexibility and enhance the economic viability for companies operating in these technically challenging offshore areas.
Natural gas is a critical resource for multiple sectors, including transportation (as CNG), household use (PNG), fertilizer production, and power generation. The revised price ceiling could influence the cost structures of these sectors. However, the increase does not guarantee an immediate or proportional rise in retail prices for consumers, as the actual impact will depend on the prices at which gas is supplied and how downstream consumers manage cost increases.