Domestic natural gas prices are likely to be slashed by over 10 per cent to US $5.02 per unit from April 1, hitting revenues of companies like Oil and Natural Gas Corp (ONGC) and Reliance Industries.
The prices of natural gas are due to be revised from April 1, based on average rates at key international hubs. The new rate will be around US $5.02 per million British thermal unit (mmBtu) as compared to the current price of US $5.61, sources privy to the development said.
On a gross-calorific value basis, the price will be around US $4.67 per mmBtu as compared to US $5.05 currently.
The Prime Minister Narendra Modi-led NDA government had, in October 2014, used a new formula to fix price of almost all domestically produced natural gas at US $5.61 per mmBtu for the period up to March 31.
Rates for next six months are to be decided based on one year average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter.
The rate for April 1 to September 30, therefore, would be based on average price at the international hubs during January to December 2014.
Sources said the oil ministry is likely to announce the new rates sometime this week.
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