India cuts gas price to decade low adding to producer misery
India has cut the price for most of its natural gas produced from domestic fields to a level last seen in 2010 and well below the production cost of Oil & Natural Gas Corp. and Oil India Ltd.
The price of gas produced from fields awarded to state explorers has been fixed at $1.79 per million British thermal units, according to the oil ministry’s Petroleum Planning & Analysis Cell. It also cut the ceiling price for gas produced from difficult fields by almost 28% to $4.06/mmBtu.
The new prices, effective for six months from Oct. 1, will make the gas business unprofitable for producers and undermine investments that are key to future production at a time when Prime Minister Narendra Modi aims to increase the share of natural gas in India’s energy mix to 15% by 2030 from about 6%.
