News Brief | February 2016
Gas prices may rise, deregulation likely
In a move that may escalate the natural gas prices, the Centre is learnt to be seriously considering a proposal to allow its cost to be determined by market forces.
A Cabinet note circulated by the petroleum ministry has this clause, and once approved, natural gas prices may go up by several notches.
The government at present regulates the price of natural gas, which now stands at around $4 per mmBtu (British thermal unit). If natural gas prices are freed, or allowed to be fixed by exploration firms that excavate gas, they may go up to around $15 to $20 per mmBtu, industry sources said. This kind of pricing freedom for natural gas is being considered for future rounds of auction of the natural resource, the sources added. It is learnt the proposal had first been discussed within the government around six months back.