India lowers domestic natural gas price in March

Market: Natural gas
04/03/25

India has lowered its domestic natural gas price to $7.80/mn Btu for March, from $7.94/mn Btu a month earlier.

This is in line with the mechanism that sets prices at 10pc of the monthly average of the Indian crude basket. Imported LNG prices delivered to the Indian west coast have eased marginally, with Argus assessing first-half April prices at $13.40/mn Btu on 3 March, from $13.80/mn Btu for March-delivery vessels.

But market participants would only pay $6.50/mn Btu, the ceiling price set by the government in 2024, for conventional gas produced by state-controlled upstream companies such as ONGC and Oil India. The price of gas produced from deepwater, ultra deepwater, high temperature and high-pressure areas has been set at $10.16/mn Btu for October 2024-March 2025, higher from the previous cap of $9.87/mn Btu that ended on 30 September.

The government approved the revised natural gas pricing mechanism in April 2023, under which domestic gas prices are revised every month. Prices of gas from deepwater, high temperature and high-pressure areas are revised every six months.

Natural gas prices are benchmarked to 10pc of the monthly average of the Indian crude basket — a weighted average of Dubai and Oman sour grades and Brent sweet crude prices — under the revised mechanism.

January imports rise

India's LNG imports in January rose by 8pc on the year to 3.04bn m³, while output fell slightly by 2pc on the year to 3bn m³, latest oil ministry data show. India's natural gas consumption in January rose by 3pc on the year to 6bn m³, the data added.

Natural gas consumption rose sharply by 12pc on the year at 72.12bn m³ in 2024, with imports taking a 50pc share at 36.2bn m³, up by 23pc on the year, oil ministry data showed. India's natural gas output reached 35.9bn m³, up by 2pc on the year.

The government has outlined plans to make the country a gas-based economy, with the share of natural gas in its primary energy mix targeted to rise to 15pc by 2030, from around 6pc in 2022. It also aims to expand domestic gas consumption and transition from more polluting fuels like coal, as part of efforts to cut carbon emissions by 1bn t by 2030 from 2005 levels, targeting net zero emissions by 2070.

By Rituparna Ghosh

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