Live
- Disinformation major challenge, says Pak army chief after drawing flak on social media
- Digital media platforms must curb fake news, safeguard democracy: Ashwini Vaishnaw
- BJP wants to form govt in Jharkhand to loot its natural resources: Kharge
- Germany's healthcare sector hit by skilled labour shortages
- Mallikarjun Kharge predicts INDIA bloc’s victory in Jharkhand, promises to fulfill seven guarantees
- Israel renews attacks on Beirut's southern suburbs after evacuation call
- Uzbekistan continues gas accounting, control to ensure stable supply
- Transform Anganwadi Centers into Hubs of Quality Nutrition and Education: Collector Badavath Santosh
- 'Never in history has Maharashtra slid so badly': Chidambaram faults BJP on state's economic condition
- Farmers Must Registered Livestock Details - Veterinary Doctors
Gas prices may fall 16% in 2016
Highlights
Natural gas prices in India are likely to decline 16 per cent next year before recovering gradually, but may not regain the current year rate till at least 2020.
New Delhi: Natural gas prices in India are likely to decline 16 per cent next year before recovering gradually, but may not regain the current year rate till at least 2020.
Price of natural gas, using the formula approved by the government in October last year, is projected to fall to $3.22 per million British thermal unit in the first half of 2016-17 from current $3.82 per mmBtu.
Rates, which are set using prevalent price in gas surplus nations like the US, Russia and Canada, are fixed for six months and accordingly are projected to rise to $3.32 in second half of 2016-17 fiscal.
These projections about the natural gas prices in India have been carried in the report of a US-based consultant DeGolyer and MacNaughton (D&M) on the dispute between ONGC and Reliance Industries over sharing of gas reservoir in the KG Basin.
According to the forecast, gas prices will be $3.36 per mmBtu and $3.42 in the first and second half of 2017-18 fiscal and would be around $3.45 in the next fiscal. In 2019-20, gas prices are projected to reach $3.49.
As per the mechanism approved in October, 2014, the price of domestically produced natural gas is to be revised every six months using weighted average or rates prevalent at Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter.
The current price of $3.82, for the period October 1, 2015 to March 31, 2016, is based on average of prices during July 1, 2014 to June 30, 2015. Rates in first half of current fiscal were $4.66. When the formula was implemented in October last year, gas prices had risen to $5.05 per mmBtu from long standing rate of $4.2.
Goldman Sachs had in a report last month stated that "Indian domestic natural gas prices that are linked to prices in gas surplus economies remain materially below the costs to develop marginal and deep-water fields and hence do not incentivise exploration and production capex."
The cost for new deep-water discoveries ranges between $6 to $7 per mmBtu. Gas price in India, it said, is lower than $9 per mmBtu gas price in China, $10.5 of the Philippines, $6.5 of Indonesia and $8 per mmBtu price prevalent in Thailand and Malaysia.
Next Story
ADVERTISEMENT
