Gas price for Reliance cut by 18% to $10
The price of natural gas produced from difficult areas like deepsea KG-D6 block of Reliance Industries on Sunday was cut by a steep 18 per cent, in line with softening of benchmark international gas prices, an official notification said.
However, the price of gas that is largely used for making CNG for fueling automobiles or piping to households kitchens for cooking purposes will remain unchanged due to a price cap that is set at 30 per cent less than market rates such as that paid to Reliance. For the six-month period starting October 1, the price of gas from deepsea and high-pressure, high-temperature (HPTP) areas has been cut to $9.96 per million British thermal unit from $12.12, oil ministry’s Petroleum Planning and Analysis Cell (PPAC) said in a notification.
The government bi-annually fixes prices of the locally-produced natural gas -- which is converted into CNG for use in automobiles, piped to household kitchens for cooking and used to generate electricity and make fertilisers. Two different formulas govern rates paid for gas produced from legacy or old fields of national oil companies like ONGC and OIL, and for newer fields lying in difficult-to-tap areas, such as deepsea. Rates are fixed on April 1 and October 1 each year. In April this year, the formula governing legacy fields was changed and indexed to 10 per cent of the prevailing Brent crude oil price.