India Raises Natural Gas Price Cap for Offshore Fields
The Indian government has increased the price ceiling for natural gas extracted from deep-water and other difficult offshore fields. Starting October 1, 2026, the maximum price will rise to USD 9.89 per million British thermal units (MMBtu), up from USD 8.90. In rupee terms, this translates to an increase from approximately Rs 930 to Rs 1,030 per MMBtu. This adjustment applies until March 31, 2027.
The new pricing framework affects fields where extraction is more costly than in conventional areas, including the KG-D6 block in the Krishna-Godavari basin. The higher price cap is expected to benefit companies operating in these challenging offshore regions.
Natural gas is used as compressed natural gas (CNG) for vehicles, piped natural gas (PNG) for households, and as a key raw material for fertiliser production and power generation. A change in domestic gas pricing could impact these sectors, though the exact effect on retail prices remains uncertain. Whether CNG and PNG consumers will face higher costs depends on how distributors and users absorb or pass on the increased cost.