The domestic natural gas price has increased to $9.20 per metric million British thermal units (mmBTu) from $8.60 at present.
A petroleum ministry notification on Saturday said that the new rates will come into effect from October 1.
The hike is expected to affect end-consumers, as city gas distribution companies are likely to accordingly raise the prices of compressed natural gas (CNG) as well the piped natural gas (PNG), commonly referred to as cooking gas.
This marks the second month in a row when the price of natural gas has been raised by the government. In September, the per mmBtu price was increased from $7.85 to $8.60.
The price of domestic natural gas has been linked to the India crude oil basket since April and is changed every month.
The increase has come in the backdrop of the rise in global crude oil prices on supply concerns.
The government has hiked the special additional excise duty (SAED) on crude petroleum to Rs 12,100 per tonne with effect from September 30.
In the last fortnightly review on September 15, windfall tax on domestically produced crude oil was set at Rs 10,000 per tonne.
Besides, the SAED or duty on export of diesel will be cut to Rs 5 per litre, from Rs 5.50 per litre at present.
The duty on jet fuel or Aviation Turbine Fuel (ATF) will be reduced to Rs 2.5 per litre effective Saturday, from Rs 3.5 per litre at present. The SAED on petrol will continue at nil.