Reliance Industries Next month, Reliance Industries may make a big cut in the price of natural gas produced from difficult fields like KG-D6. The company can reduce the prices of produced gas by up to 14 percent. Presently the price of produced gas is currently $12.12 per unit. It is being told that the prices of natural gas are expected to decrease due to reduction in fuel prices globally. Sources said that for a period of six months starting from October 1, deep sea areas and high pressure and high temperature (HPTPThe price of gas produced from ) can be reduced to $ 10.4 per 1 million British thermal units (per unit). It is currently $12.12 per unit. The government decides the price of natural gas produced in the country twice a year. Natural gas is converted into CNG and PNG. CNG is used as vehicle fuel, while PNG is used for cooking in homes. Apart from this, it is also used in electricity and fertilizer production.
How are gas prices determined?
There are two formulas to decide the price of gas. Oil and Natural Gas Corporation (ONGC) and Oil India Ltd. ,OILThese formulas are used for gas produced from ) and gas produced from new fields located in difficult areas like deep sea. The rates are determined every year on 1st April and 1st October. In April this year, the formula related to old areas was changed. Under this, it was standardized at 10 percent of the current Brent crude oil price. However, the rate was capped at $6.5 per unit. Rates for old areas are now decided on a monthly basis. The price for the month of September became 8.60 US dollars per unit, but due to the fixed limit, producers will get only 6.5 US dollars. The average price of Brent crude oil this month is around $ 94 per barrel. But with the limit fixed, the rate will remain at $6.5.
Russia-Ukraine war had strengthened fuel prices in global markets.
Sources said that the old formula is being used for the price of gas produced from difficult fields. Under this, a one-year average of international LNG prices and rates at some global gas centers is taken with a lag of one quarter. He said that there was a decline in international prices in the reference period from July 2022 to June 2023. That is why prices for gas produced from difficult areas will be lower. For a period of one month starting April 1, the price of gas produced from difficult fields was reduced to US $ 12.12 per unit, which was earlier a record of $ 12.46. Due to the Russia-Ukraine war, fuel prices had strengthened in the global markets. Due to this, the price of gas produced from old fields in the country also increased to a record $8.57 between October 2022 and March 2023. At the same time, the price of gas produced from difficult areas became $12.46.
CNG and PNG prices had increased by 70 percent
Based on the old formula, the price of gas produced from old fields was to be increased to $ 10.7 per unit from April 1, but to keep the prices under control, the government changed the formula and fixed a limit on the price. In the past, due to increase in gas prices, the rates of CNG and cooking gas (PNG) reaching homes through pipes had increased by 70 percent. This directly hit the pockets of the common people. Besides, the inflation index also had a big impact. However, now people are expected to get great relief from the price cut.
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