India raises deepwater gas price ceiling to support offshore producers

The Indian government has raised the ceiling price for natural gas extracted from deepwater, ultra-deepwater, and high-pressure, high-temperature fields to $9.89 per million British thermal units (MMBtu). This adjustment, effective from October 1, 2026, to March 31, 2027, marks an increase from the previous $8.90 per MMBtu and aims to support producers operating in technically challenging gas blocks, such as Reliance Industries-BP's KG-D6 project.

The revised price ceiling was announced by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas. The hike is intended to provide relief to producers facing higher exploration and production costs in offshore fields compared to onshore and legacy fields.

Despite the increase, gas from these difficult fields remains subject to a government-notified ceiling, even though they enjoy marketing and pricing freedom under the existing policy framework. Meanwhile, the price ceiling for natural gas from the nomination fields of state-run companies ONGC and Oil India Ltd (OIL) has been kept unchanged at $7 per MMBtu.