A picture used for a representative purpose. | Photo Credit: S. Siva Saravanan
On Monday (March 31, 2025), the government increased the price of natural gas made from old older fields called APM – the key input used to produce CNG and the production of electricity and product fertilizer.
The APM price was increased to $ 6.75 per million British thermal units with an efficiency of April 1 out of $ 6.50 per MMBTu, the announcement of the oil wing of the Ministry of Oil said.
APM gas is produced by state -owned companies Oil and natural gas (ONGC) and Oil India Ltd (ROPA) from fields given to them for nomination. This gas is an entrance that is used in a kitchen gas that is facing a household kitchen and is also transformed into CNGs for car operating, fertilizer production and electricity production.
This is the first increase in APM gas price in two years and in accordance with the plan set by the government.
In April 2023, the Cabinet of the Trade Union, which is to transfer most of the home gas to 10% of the monthly average import price of oil with a floor of 4 to a million British thermal units and a limitation of $ 6.5.
At the same time, the government played with a recommendation of $ 0.50 per MMBTU an annual increase in full deregulation in 2027. The Cabinet decided not to change the rates to two years and then increase by $ 0.25 per year.
The Monday notification hike is in line with this decision.
Cell for oil planning and analysis (PPAC) stated that the price of APM gas for April 1 to April 30, 2025 should be $ 7.26 per MMBTu, which should be 10% of the oil price indexation. However, this was subject to the ceiling price. The price of the ceiling was increased from $ 6.50 per MMBTU to $ 6.75. This ceiling will be effective from April 2025 to March 2026 and will increase in April next year by another $ 0.25 per MMBTU.
Before April 2023, the price of gas made from the fields applied to the regime of the managed price mechanism (APM) – which represents 70% of domestic gas production – half -year on the basis of a formula compared to average international prices for four gas trading.
APM gas is provided by city distributors for supply to CNG segments and residential PNGs, which jointly represent 60% of their sales volume.
After the decision in April 2023, APM gas prices are revised per month, but are subject to the prices of ceiling and floors. The price of the ceiling is now $ 6.75 for MMBTU.
APM gas prices have seen wide fluctuations in the years until the decision in April 2023. From the minimum of $ 1.79 per MMBTU in 2021 to the highest $ 8.57 for 6 months of the term ending March 2023.
According to the key recommendations of the Committee adopted by the Government, the APM formula is now revised and determined as 10% of the slope to oil prices, but with the price of floor and ceiling $ 4 for MMBTU and $ 6.5.
Rates paid for gas made from heritage or old areas of national oil companies such as ongc and oil and a newer field lying in difficulty knocking, such as Deepsea, controls two different formulas.
The rate of difficult fields, such as the KG-D6 of Reliance Industries, was set at $ 10.04 per MMBTu for six months of April 1 compared to $ 10.16 in the previous six-month period, according to PPAC.
Published – 31 March 2025 17:49
