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Investing.com -- India has increased the price of locally produced gas from oil fields by almost 4% to $6.75 per million metric British thermal units (mmBtu) for April, as compared to the previous month’s price of $6.50 per mmBtu, according to a government website update on Monday.
This is the first adjustment in two years for the price of gas extracted from older fields. In 2023, the Indian government had established a maximum price of $6.50 per mmBtu for a period of two years. This cap included a provision for an annual increase of 25 cents from the third year onwards.
Additionally, the ceiling price for gas to be extracted from challenging fields has been set at $10.04 per mmBtu for the period from April to September. This is a slight decrease from the previous six months’ ceiling price of $10.16 per mmBtu, as shown by the Petroleum Planning and Analysis Cell of the oil ministry’s website.
These prices will be used on a gross heat value basis.
The increase in the price of gas produced from oil fields will result in higher earnings for the Oil and Natural Gas Corp and Oil India (NSE:OILI). However, it will also lead to an increase in prices for industrial buyers and companies in the fertilizer and city gas distribution sectors.
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