LPG, CNG prices to rise? Centre hikes APM rate for ONGC, Oil India
New Delhi: The government has marginally increased the administered price of natural gas produced by state-run firms, raising the rate for Oil and Natural Gas Corporation and Oil India Limited to USD 7 per mmBtu from USD 6.75, according to an official notification.
The revised price applies to gas extracted from legacy and nomination fields under the administered price mechanism (APM), which accounts for nearly 60 per cent of India’s domestic gas output of about 92 million standard cubic metres per day. The hike is expected to have a ripple effect across sectors such as fertilisers, CNG and piped cooking gas.
The revision follows the pricing formula approved by the government in 2023, under which gas prices are linked to 10 per cent of the monthly average of the Indian crude basket and are notified every month. For gas from nomination blocks, the price is subject to a floor and a ceiling.
As per the latest update, the ceiling has now been raised to USD 7 per mmBtu for the current period, in line with the provision for a gradual annual increase after the initial cap period.
The Petroleum Planning and Analysis Cell (PPAC) said in its order, "For the gas produced by ONGC/OIL from their nomination fields, the above-mentioned APM price shall be subject to a ceiling of USD 7 per mmBtu on GCV basis for the same period."
It added that the domestic natural gas price for April stands at USD 10.76 per mmBtu on a gross calorific value basis, though the effective price remains within the prescribed ceiling.
Natural gas is a key input across industries, used in fertiliser production, power generation, as CNG fuel for vehicles and as piped cooking gas for households.
The price adjustment comes amid rising global energy costs triggered by tensions in West Asia, which have disrupted supply chains. Crude oil prices have surged by nearly 50 per cent in the past month, crossing USD 100 per barrel.
The government had earlier allowed a 20 per cent premium over APM rates for gas produced from new wells and well interventions by ONGC and OIL in their nomination fields.
Separately, gas from difficult fields such as deepwater and high-pressure zones — including the KG-D6 block operated by Reliance Industries Limited — enjoys marketing and pricing freedom, subject to a ceiling fixed by PPAC.
For the period from October 1, 2025, to March 31, 2026, the ceiling price for such gas was set at USD 9.72 per mmBtu. However, the ceiling for the April–September 2026 period is yet to be announced.