In a significant policy move, the Indian government has approved a 20% premium over the regulated APM price for natural gas extracted from new wells by Oil and Natural Gas Corporation (ONGC). This adjustment aims to incentivize the development of challenging and capital-intensive gas fields.
Currently, domestic gas pricing is regulated under two main regimes, with the APM price pegged to 10% of the Indian crude oil basket price, capped at USD 6.5 per million British thermal units. The new premium pricing, totaling 12% of the crude basket price, is expected to enhance ONGC’s investment capacity and accelerate the development of new gas projects, supporting the national goal of increasing natural gas’s share in the energy mix to 15% by 2030.