In line with the cut in natural gas prices globally, the government has revised domestic gas prices by 26.01 percent downwards to $2.39 per MMBTU for the April to September 2020 period. This was priced at $3.23 per MMBTU from October 2019 to March 2020.

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The government has lowered the ceiling price by 33.45 percent for gas produced from deepwater, ultra-deepwater and high pressure, and high-temperature areas. The gas price ceiling for April-September 2020 is set at $5.61 per MMBTU on a gross calorific value basis against the earlier price of $8.43 per MMBTU for October 2019 to March 2020.

Natural Gas price of $2.39/mmBtu set for April-Sep 2020 is lowest since new domestic natural gas pricing guidelines issued in 2014 pic.twitter.com/KCOv1GXOXC

— CNBC-TV18 (@CNBCTV18Live) March 31, 2020

Reduction in domestic gas prices will be positive for the fertilizers, electricity, CNG sectors and consumers with piped gas connections will benefit from the price cut.

Domestic gas production declined in India by 8.8 percent, while consumption increased by 25.4 percent, and LNG import was 67.7 percent higher in February 2020 compared to the corresponding month last year. India's import dependency based on consumption for gas was at 52.5 percent until February FY20.

India's domestic gas production stood at 27,931 MMSCM until February in FY20 and ONGC was the largest domestic producer with 21,841 MMSCM. The revision in price will impact the revenue of domestic gas producing companies like ONGC, OIL, private and joint venture players and discourage exploration in India.

First Published:Mar 31, 2020 7:51 PM IST