Regulated gas price for ONGC, OIL raised, Pg17

Key Highlights:

• The administered price of gas for ONGC and OIL increased to $7 per mmBtu.
• The previous price was $6.75 per mmBtu.
• The revised pricing applies to gas from legacy fields.
• The price is determined as 10% of the monthly average of the Indian Crude Basket.

Detailed Insights:

• The administered price mechanism (APM) determines the price of natural gas produced from old fields allocated to ONGC and OIL without competitive bidding.
• The Indian Crude Basket represents the weighted average of crude oil grades imported by India.
• This price revision is notified monthly and impacts the revenue of ONGC and OIL, potentially affecting their investment decisions in exploration and production.
• Changes in natural gas prices can influence the cost of electricity, fertilizers, and other gas-dependent industries.

Key Concepts Involved:

• Administered Price Mechanism (APM): A mechanism where the government sets the price of certain goods or services.
• Legacy Fields: Old or mature oil and gas fields that have been in production for a long time.
• Indian Crude Basket: A reference benchmark for crude oil prices in the Indian market.