The Modi government introduced the pricing regime in 2014 which revises gas prices every six months based on average rates in gas-surplus markets globally
The Hush Post: Domestic LPG and PNG (piped natural gas) consumers and people using natural gas to run their vehicles (CNG or compressed natural gas) are likely to feel the heat of increased prices from April 1.
The benchmark price for natural gas produced from domestic fields is expected to hit a two-year high during the six-monthly revision due on April 1. According to a newspaper report, government sources said the benchmark price is expected to go up to $3.06 per unit from $2.89 at present.
The price increase will, however, benefit private producers such as Reliance as well as state-run ONGC and OIL at a time when they are investing more in new gas fields. The gas producing companies have been unhappy since October 2014, when the new gas pricing regime was introduced. Under the new pricing regime introduced by the NDA government, gas prices are to be revised every six months, based on average rates in gas-surplus markets.
The new pricing formula saw benchmark gas prices sliding every six months with the fall in rates at global gas trading hubs. The Indian companies maintained that such low prices had made their gas field operations unviable. The benchmark price was raised for the first time in nearly three years to $2.89 per unit in October last year after five rounds of reductions.