Natural gas prices may dip below $4.2/unit

Natural gas prices in the country may be reduced from $5.16 per million British thermal unit (mmBtu) to below $4.2 per unit beginning October 1 as international prices, to which they are benchmarked, have come down, an oil ministry official said.

The revision in gas prices could also lead to lower piped cooking gas and CNG prices. Power plants which use gas a fuel and fertliser units, which use it as an input would also benefit.

Using the prevailing price in gas surplus nations like the US, the government last October announced a new pricing formula that led to rates rising by about 33 per cent to $5.61 per mmBtu for a period up to March 31, 2015, from the long-standing price of $4.2.

This was lower than price of over $8 per mmBtu cleared by the erstwhile United Progressive Alliance government based on a different formula.