Money News

India slashes natural gas prices to multi-year low of $1.79/mmBtu

NEW DELHI (Reuters) - India has cut the price of locally produced gas for October 2020-March 2021 by about a quarter to a multi-year low of $1.79 per million metric British thermal units (mmBtu), the government said on Wednesday.

This would be the lowest price since 2014, when the nation began linking local rates to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas.

It also set the ceiling price for gas produced from more challenging fields at $4.06 per mmBtu for the same period, down 27.6% from the prior six-month period, the statement showed.

The prices will be applicable on a gross heat value basis.

Lower natural gas prices mean reduced costs for gas for fertilisers, automobiles and households. They will also cut earnings for state-owned Oil and Natural Gas Corp Ltd and Oil India Ltd.

Reporting by Nidhi Verma; editing by Jason Neely