Natural gas price increase by 40% - a careless, short-sighted decision.

Government of India has expanded the domestic price of natural gas by 40% to $8.57/M British Thermal Units (mBtu) on gross calorific value (GCV) basis for 2H FY 2023, starting 1 Oct 2022, compared to the period of Apr-Sep 2022. The price ceiling for gas extracted from challenging fields such as ultra-deep water, deep water and high pressure-high temperature fields has also been raised by about 25% to $12.46/mBtu. The former highest level in gas price was seen in 1H FY 2023 at $6.10/mBtu. Before this, the highest price was recorded at $5.05/mBtu for the Nov 2014-Mar 2015 period. The highest ceiling price for gas from challenging fields reached $9.92/mBtu during 1H FY 2023. Prior to 1H and 2H FY 2023, the highest price recorded was at $9.32/mBtu during the period of Apr 2019-Sep 2019. India meets 50% its natural gas demand via domestic production, while the rest is imported as liquified natural gas (LNG). With the price hike for natural gas, the manufacturing cost of goods and services will expand proportionately, which will result in the rise in the market price of derivative products. Original Source: Chemical Weekly, http://www.chemicalweekly.com/.