India Raises Deepwater Gas Price Ceiling to $9.89/MMBtu

The Indian government has announced an increase in the price ceiling for natural gas produced from challenging fields. From October 1, 2026, to March 31, 2027, the new ceiling is set at $9.89 per million British thermal units (MMBtu), up from the previous rate of $8.90.

The higher price cap applies to gas produced from deepwater, ultra-deepwater and high-pressure, high-temperature discoveries. This includes fields such as Reliance Industries' KG-D6 block in the Krishna-Godavari basin. Producers operating in these areas will benefit from the increased pricing flexibility.

The government has maintained the price ceiling for gas produced from legacy fields at $7 per MMBtu. The Administered Price Mechanism (APM) price for October is set at $11.22 per MMBtu, but remains capped at $7 per MMBtu. This move aims to incentivize state-owned companies ONGC and OIL to invest in developing additional reserves.

The separate pricing mechanisms for legacy fields and newer discoveries are designed to balance the interests of producers and consumers. The higher price ceiling is expected to provide relief to producers operating in challenging offshore areas, where production costs are typically higher than those from mature onshore fields.