Prices of gas for Reliance Industries to be reduced by 14% from next month

20 Sep 2023 , 09:55 AM

According to reports, the price of natural gas produced in hazardous locations like as Reliance Industries’ KG-D6 is anticipated to be slashed by roughly 14% starting next month to reflect lower energy prices.

They predict that the price of gas from deepsea and high-pressure, high-temperature (HPTP) locations will be reduced to roughly $10.4 per million British thermal units for the six-month period beginning October 1 from the present $12.12.

The government sets the price of locally produced natural gas twice a year, which is then transformed into CNG for use in automobiles, piped to household kitchens for cooking, and used to create electricity and fertilizer.

Rates paid for gas generated from legacy or ancient fields of national oil corporations such as Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), as well as newer fields in difficult-to-tap locations such as deepsea, are governed by two separate formulas.

The formula regulating legacy fields was revised in April of this year and pegged to 10% of the current Brent crude oil price. However, the fee was set at $6.5 per mmBtu.

Legacy field rates are now established on a monthly basis. The price for September was $8.60 per mmBtu, but due to the cap, producers would only receive $6.5.

This month, Brent crude oil has averaged around $94 per barrel, but rates will remain set at $6.5.

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