New Delhi: The government has cut the price of natural gas produced from old (legacy) fields for the first time in two years. This gas is mainly used to produce CNG for vehicles and PNG (piped cooking gas) for homes.
The price has been brought down from USD 6.75 to USD 6.41 per million British thermal units (mmBtu). This decision was shared through a notice from the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC).
New gas pricing system started in April 2023
In April 2023, the government began using a new way to fix gas prices. This method links the price to 10 per cent of the average global crude oil import price. There is also a minimum price (USD 4) and a maximum price (USD 6.5) set to avoid too much fluctuation.
From April 2025, the price cap increased to USD 6.75. In April this year, the price as per the formula was USD 7.26, but the cap kept it at USD 6.75. In May, the price came to USD 6.93 but stayed capped.
Oil price drop helps lower gas rates
Oil prices dropped globally due to weak demand, and in May, the average crude oil price for India was around USD 64 per barrel. Based on this, the APM gas price has now been fixed at USD 6.41 per mmBtu for June 1 to June 30, 2025.
This price is based on Gross Calorific Value (GCV), which measures the energy content of the gas.