The Centre has raised the maximum selling price for natural gas produced from deep-water, ultra-deep-water and high-pressure-high-temperature (HP-HT) fields, increasing the ceiling from USD 8.90 to USD 9.89 per million British thermal units (MMBtu).
The revised price, notified by the Ministry of Petroleum and Natural Gas, will come into effect from October 1, 2026, and remain applicable until March 31, 2027.
In rupee terms, the ceiling has gone up from roughly Rs 930 to around Rs 1,030 per MMBtu.
Higher ceiling aimed at supporting offshore production
The pricing mechanism covers natural gas extracted from offshore fields where production involves considerably higher technical and operational costs compared with conventional gas fields.
Major projects such as KG-D6 in the Krishna-Godavari basin come under this pricing framework. The increase is expected to offer producers greater pricing flexibility and strengthen the economic viability of gas extraction from technically challenging offshore blocks.
Possible impact on CNG, PNG and fertiliser sectors
Natural gas plays an important role across several sectors of the Indian economy. It is supplied as compressed natural gas (CNG) for vehicles and piped natural gas (PNG) for households. The fuel is also a key raw material for the fertiliser industry and is used in power generation.
The higher ceiling could consequently influence the input costs of industries and businesses that rely on natural gas.
However, the revision does not necessarily mean that consumers will immediately face a similar increase in CNG or PNG prices. The actual impact will depend on the price at which gas is purchased, the sourcing mix of individual companies and the extent to which distributors absorb or pass on higher costs.
New price ceiling effective from October 1
With the revised ceiling in place, gas producers operating in deep-water and other technically difficult fields will have greater room to price their output. At the same time, downstream sectors will be closely watched for any changes in input costs and consumer prices during the new pricing period.
The revised ceiling will remain in force for six months, from October 1, 2026, through March 31, 2027.