New Delhi: The government has fixed the domestic natural gas price at $ 6.99 per million British thermal units (MMBTU) on a gross calorific value (GCV) basis for the period from September 1 to September 30, 2025, according to a notification issued by the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas.
For gas produced by state-owned ONGC and Oil India Ltd (OIL) from their nomination fields, the price will remain capped at $ 6.75/MMBTU on GCV basis for the same period. This cap is in line with the pricing reforms introduced by the government in April 2023, which linked the ceiling rate for APM (Administered Price Mechanism) gas to 10 percent of the prevailing crude oil price in the Indian basket.
The new framework for natural gas pricing was adopted following recommendations of the Kirit Parikh Committee to ensure affordability for consumers while also providing producers with a fair return. Under this mechanism, domestic gas prices are revised every month instead of the earlier six-monthly revisions, and are based on the trailing average of Indian crude basket prices.
India consumes about 175-180 million standard cubic metres per day (mmscmd) of natural gas, of which roughly half is met through domestic production and the rest through imports in the form of liquefied natural gas (LNG). Gas from ONGC and OIL’s nomination blocks, priced under the APM system, accounts for nearly two-thirds of domestic output and is largely supplied to priority sectors like fertilisers, city gas distribution (household PNG and CNG), and power.
The government has been trying to balance producer revenues and consumer affordability, particularly as imported LNG remains volatile and often higher priced compared to domestic supplies. By capping the ceiling price, the policy aims to shield consumers and sectors dependent on subsidised gas from steep fluctuations in international markets.
The notification added that the ceiling of $ 6.75/MMBTU will continue to apply to APM gas, while the market price for gas from new fields or difficult terrains remains subject to a different formula and ceiling, currently linked to global benchmarks like Henry Hub, NBP and LNG Japan Korea Marker.>
