India Keeps Gas Prices Steady as Government Mulls New Rate Regime

(Bloomberg) -- India kept domestic gas prices unchanged, a government statement said Friday, even as consumers reeling from soaring bills amid the global energy crisis seek a change in the pricing regime.

The government sets the price of gas from domestic fields every six months, however this time around it decided to keep any changes on hold for the period beginning April 1.

Gas produced from old blocks that were awarded to Oil & Natural Gas Corp. and Oil India Ltd. will continue to cost $8.57/MMBtu until further notice, according to the oil ministry's Petroleum Planning and Analysis Cell. 

The ceiling price of gas produced from difficult deep-water acreage, such as Reliance Industries Ltd.'s KG-D6 block in the eastern offshore, has been cut to $12.12/MMBtu from $12.46/MMBtu in the second half of fiscal 2022-23.

India sets the prices for old fields through a formula linked to international markets such as the US, Canada, Russia and the UK, but with a lag. 

Consumers are calling for a new regime that will help cool prices. A government panel was appointed after domestic gas prices skyrocketed following Russia's invasion of Ukraine. 

The panel, headed by Kirit Parikh, last year recommended fixing the price of gas produced from old blocks at 10% of the monthly average of the import price of Indian crude basket, with a floor of $4/MMBtu and a cap of $6.5/MMBtu. 

The federal cabinet has yet to approve recommendations of the panel.

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