India hikes regulated wholesale natural gas price for August

India has raised the regulated wholesale price of locally produced natural gas to $8.51/mn Btu for August, up from $8.24/mn Btu in July, the country’s oil and natural gas ministry announced on July 31.

This price adjustment follows a new formula introduced last year. Under this formula, the price of domestically produced gas is set at 10% of the monthly average of the Indian crude basket and is notified on a monthly basis. Previously, prices were adjusted every six months.

However, the price of gas produced by ONGC and Oil India from their nomination fields has a floor of $4/mn Btu and a cap of $6.5/mn Btu. For August, the gas produced from these fields by the two state-owned companies will remain unchanged with a ceiling price of $6.5/mnBtu. Nomination fields are exploration blocks allocated to state-run oil companies without an auction or production sharing contract.

The previous pricing formula was based on the prices at four major global gas trading hubs: Henry Hub, Albany, the National Balancing Point (UK), and Russian gas.

The government's decision is based on the recommendations of an expert panel chaired by economist Kirit Parikh, which submitted its report in November 2022.