Geopolitics affects us all equally directly or indirectly and this is quite evident with the ongoing Russian-Ukraine crisis Indian Central Government has increased the price of locally produced natural gas starting tomorrow 1st April for the next six months, this move comes due to an increase in the global gas prices.
The gas price from state-owned ONGC and Oil India Limited will increase from the present $ 2.90 to $ 6.10 per million British thermal units.
With effect from 1st April, the Indian natural gas price will be shooting up twice its current price. And predictions are on starting in October 2022 the prices could quadruple. The general going price for gas extracted from tricky and difficult fields like the KG-D6 in the KG basin run jointly by Reliance-BP will also see an increase.
This is great news for major players like Reliance Industries, GAIL India limited, HP Corporation Limited and ONGC as they look forward to increasing their production. However domestic users/ common man will be at the receiving end of this price rise.
As per analysts, gas distribution companies will calibrate their margins well in advance and their business will have a short-term impact due to the global gas price rise.
It’s quite the general norm that our government regulates the gas prices every 6 months for gas extracted from normal fields, as per the prices played at certain international markets. With predicted inflation on the rise, it is quite unclear whether the government will put a cap on the maximum price any gas producing company can charge.
