Domestic Natural Gas Price Following Trend in International Market

The Petroleum Planning and Analysis Cell (PPAC) has revised the domestic natural gas price which decreased by almost 12.5% following a similar trend in the international market. Price cap for gas from difficult fields also declined by 9.5% in the six-monthly price revision updated on Friday. Decrease in gas prices would adversely impact the profit margin of domestic producers such as Reliance Industries Limited, ONGC, Vedanta and Oil India Limited. Government set domestic natural gas pricing formula which takes into account the average price of international trading hubs such as Henry Hub, Alberta Canada, National Balancing Point and Russia, fell to USD 3.23 per mmBtu for October-March 2019, which traded at USD 3.69 per mmBtu in the previous six-month period. Due to an oversupply of LNG in the international market, spot LNG prices have slashed drastically to USD 4 per mmBtu.