In what may offer huge relief to consumers, it has been reported that prices of PNG or piped natural gas, liquefied petroleum gas or LPG or cooking gas and CNG or compressed natural gas are going to see remarkable fall. This is as prices of natural gas are set to be cut substantially.
The price of natural gas is revised every six months, first in April and then in October. Price of natural gas slated for revision in October is currently set at $1.90-1.94 per MMBtu, which is the lowest natural gas price set in over a decade.
Benchmark Rate Of Natural Gas Prices Set To Change
On October 1, 2020, price of natural gas is set for revision and as the natural gas exporting nations are said to change benchmark rate, the price of natural gas will be revised lower to $1.94 per million British thermal units (MMBtu). And if implemented, it shall be the third rate cut in natural gas prices in a year. In April this year, natural gas prices were brought to $2.39 per MMBtu, down 26 cents.
NDA government Came Up With The Formula To Reduce Gas Prices
In the earlier regime, for gas production, companies in the field such as ONGC and Oil India used to get $3.818 per unit and on addition of 10% royalty this would increase to $4.20 for consumers. The Congress approved the formula and this could raise gas prices. But the NDA government cancelled its implementation and came up with a new formula, wherein gas was priced at $5.05 per unit at the time of first revision, which then was reduced in the subsequent revision.