Natural gas prices may be cut to lowest in a decade, and it may hit ONGC revenue further

Prices of natural gas in India are likely to be cut to USD 1.9-1.94 – the lowest in more than a decade – from October, denting revenues of producers such as ONGC who are already incurring huge losses on gas production. A gas price revision is due from October 1 and going by the changes in the benchmark rate in gas exporting nations, the price is likely to be anywhere between USD 1.90 to USD 1.94 per million British thermal unit (mmBtu), sources privy to the development said.

This will be the third straight reduction in rates in one year. Prices were cut by a steep 26 per cent to USD 2.39 per mmBtu in April. Prices of natural gas, which is used to produce fertiliser and generate electricity and is also converted into CNG for use in automobiles as fuel and cooking gas for households, are set every six months — on April 1 and October 1 each year.