Demand for cut in gas rates as global LNG prices fall
New Delhi: A collapse in global liquefied natural gas (LNG) prices is fuelling demand at home for reworking the government-set price ceiling for gas from difficult terrains to cut high domestic rates in line with global prices, a move that could cap gains for producers such as ONGC and Reliance IndustriesNSE -0.62 % while boosting affordability for consumers.
The price ceiling for gas from difficult fields today stands at $9.32 per million metric British thermal unit (mmBtu) while the domestic formula price, which applies to most locally-produced gas, is $3.69 per mmBtu. By comparison, the spot rates of LNG delivered to Indian shores are in the range of $3.5-$4 per mmBtu.
