Amid the corona crisis and rising inflation, there is good news for every Indian household. It has now been reported that the prices of Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), and Piped Natural Gas (PNG) are likely to fall drastically. The prices for natural gas are going to be drastically cut amid the corona crisis, says reports.
Gas prices changes after every 6 months which is first done in April and then again in October. According to reports, natural gas prices are now set at $1.90-1.94 per MMBtu for the month of October. This is the lowest rate of natural gas prices that have been set in more than a decade.
What are the New Changes?
According to media sources, the gas exporting countries are going to change the benchmark rates of natural gas. From 1 October 2020 according to revised edition, gas prices will come down from $ 1.90 to $ 1.94 per million British thermal units (MMBTU). If this happens, this will be the third consecutive cut in natural gas prices in a year. Moreover, there was a big cut of 26% in the price of natural gas earlier in April. This reduced the price of natural gas to $ 2.39 per MMBtu.
ONGC May Increase Losses
However, the country's largest oil and gas producer, ONGC may get effected due to these price changes. As per reports, ONGC had a loss of Rs 4,272 crore in the gas business in 2017-18. It is expected to increase to Rs 6,000 crore in the current financial year.
Already ONGC is suffering losses on the production of 65 million cubic meters of gas per day. The new gas price formula which was introduced by the central government in November 2014, is based on the price centers of countries with gas surpluses like the US, Canada and Russia. Currently, the price of gas is $ 2.39 per unit, which is the lowest in more than a decade. In May 2010, the government raised the price of gas sold to electricity and fertilizer companies from $ 1.79 per unit to $ 4.20 per unit.
