The natural gas price in India as per the 2014 guidelines is fixed every six months based on the weighted average price of four global benchmarks (Henry Hub, Alberta gas, NBP, and Russian gas). In April 2023, the Indian government approved revisions of the guidelines under the administered price mechanism (APM), which mainly applies to gas produced by legacy fields and national oil companies (ONGC, OIL).
Key revisions of the guidelines include:
- The price of gas under the APM is benchmarked on a monthly basis to the price of imported crude (Indian Crude Basket) instead of the four global benchmarks
- The gas produced by ONGC and OIL from their nomination blocks will be subject to floor and ceiling prices (a floor price of $4/mBtu and a ceiling of $6.5/mBtu)
- For gas produced from new wells or well interventions, ONGC and OIL would be allowed a premium of 20 per cent over the APM price