India’s new gas pricing regime will offer greater downside protection for earnings of gas companies such as Oil and Natural Gas Corp (ONGC) and Oil India Ltd, S&P Ratings said on Friday.
The new norms will not affect the pricing for gas produced from difficult fields that companies like Reliance Industries Ltd operate.
Under the new guidelines announced on April 6, 2023, the government will set prices for domestically produced gas on a monthly basis; the rate will be 10 per cent of the average price of the Indian crude basket in the preceding month. The price will have a floor of USD 4 per million British thermal unit (mmbtu) and a ceiling of USD 6.5 per mmBtu.
