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Home / Business / Global demand likely to double domestic gas prices

Global demand likely to double domestic gas prices

The spike 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.
The increase in the price will drive up the costs of piped natural gas and auto fuel CNG.
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R. Suryamurthy   |   New Delhi   |   Published 10.03.22, 03:44 AM

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.



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