The Ministry of Petroleum and Natural Gas has raised the maximum price for natural gas produced from deep-water, ultra-deep-water and high-pressure-high-temperature (HP-HT) fields to USD 9.89 per million British thermal units (MMBtu), up from USD 8.90.
The revised ceiling, equivalent to around Rs 1,030 per MMBtu against the earlier Rs 930, will apply from October 1, 2026, to March 31, 2027.
The pricing mechanism covers offshore gas fields where extraction costs are higher than those of conventional fields. Production blocks such as KG-D6 in the Krishna-Godavari basin are covered under the framework.
The higher ceiling is expected to give producers greater pricing flexibility and support the economics of gas extraction from technically challenging offshore fields.
Natural gas is widely used across the economy, including as CNG for vehicles and PNG for households through city gas distribution networks. It is also used as a feedstock in fertiliser manufacturing and as a fuel for power generation.
The revised ceiling could affect the cost structures of these sectors, although the increase does not automatically mean an immediate or proportionate rise in retail prices.
Any impact on CNG and PNG rates will depend on the actual price at which gas is supplied and whether city gas distributors and other downstream consumers absorb higher input costs or pass them on to customers.
