India to See Natural Gas Price Cut by 10 Percent from April 1

The Economic Times reported that India will likely see the price of domestically produced natural gas drop by over 10 percent to $5.02 per unit from April 1, the first ever rate reduction of the fuel.

As quoted in the market news:

The prices of natural gas are due to be revised based on average rates at key international hubs. The new rate will be around $5.02 per million British thermal unit as compared to the current price of $5.61, mainly because of slump in rates in second half of 2014, sources privy to the development said. The move will hit revenues of companies like Oil & Natural Gas Corporation Ltd. (NSE:ONGC) and Reliance Industries Ltd. (NSE:RELIANCE).

On a gross-calorific value basis, the price will be around $ 4.67 per mmBtu as compared to $ 5.05 currently.

The BJP-led NDA government had in October 2014 used a new formula to fix price of almost all domestically produced natural gas at $ 5.61 per mmBtu for the period up to March 31.

The rates were to be revised every six month using average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

Click here to read the full Economic Times report.