India lifts deepwater gas price ceiling to $9.89 per MMBtu, caps legacy gas at $7

The oil ministry’s Petroleum Planning and Analysis Cell announced that, from Oct 1 to Mar 31, the price ceiling for natural gas extracted from deepwater, ultra-deepwater and high-pressure, high-temperature fields will rise to $9.89 per MMBtu, up from $8.90. Gas from legacy fields owned by state-run ONGC and Oil India Ltd will continue to be capped at $7 per MMBtu. For October, the APM price is $11.22 per MMBtu, but the ceiling limits the actual price for legacy field gas to $7, with a 10 % premium allowing new-well gas to reach up to $7.70 per MMBtu.

The higher ceiling is intended to provide relief to producers developing costly offshore resources, including the KG-D6 block in the Krishna-Godavari basin operated by Reliance Industries and BP. The move follows a series of incremental APM ceiling increases since 2023, which shifted pricing from six-month benchmarks to a formula linked to crude oil import prices. Adjustments in domestic gas pricing affect fertilizer production, power generation and city-gas distribution across India.