Natural gas prices are likely to double next month from the present $2.90 per mBtu because of the spike in global demand at the gas hubs, analysts said. Prices are benchmarked to the global hubs and are set twice a year.
Analysts estimate the prices to double to $6 per mBtu from $2.90 per mBtu. In deep-sea fields, the prices are expected to rise to $10 per mBtu from $6.13 per mBtu.
The spike in prices would benefit state-owned firms such as ONGC and Oil India which were given the fields on a nomination basis.
The increase in the price will drive up the costs of piped natural gas and auto fuel CNG. It will increase the tariffs of gas-based power plants and push up the fertiliser subsidy .
The BJP-led government in October 2014 adopted a formula that takes into account the volume-weighted annual average of the prices prevailing at Henry Hub (US), National Balancing Point (UK), Alberta (Canada) and Russia with a lag of a quarter.
Prices are set on April 1 and October 1.