Government Increases APM Gas Prices Amid Strategic Revisions

The government increased the price of natural gas from old fields by 4%, affecting CNG, electricity, and fertilizer production. The new price, effective April 1, reflects revised regulations linking domestic gas prices to international crude oil prices, with capped increases until full deregulation in 2027.

The government has announced an increase in the price of natural gas produced from legacy fields under the Administered Price Mechanism (APM) by 4%, raising it to USD 6.75 per million British thermal units, up from USD 6.50, effective April 1.

This marks the first increase in two years, aligning with the government's revised roadmap connecting APM prices to international crude oil rates, featuring a floor of USD 4 and a cap of USD 6.5 per MMBtu. The decision reflects broader strategic measures towards gas price deregulation by 2027.

APM gas, primarily used for CNG, residential piped gas, fertilizers, and electricity, is produced by ONGC and Oil India. Price adjustments, now monthly, are subject to ceiling mechanisms that constrain rise until deregulation is complete. The changes anticipate enhancing market stability while transitioning to a deregulated regime.

(With inputs from agencies.)