The government has increased the maximum price that can be charged for natural gas produced from difficult-to-extract fields, including Reliance Industries and BP’s KG-D6 block. The revised ceiling has been fixed at $9.89 per mmBtu, up from the earlier limit of $8.90 per unit.
The new price will apply from October 1, 2026, through March 31, 2027. The revised ceiling covers gas produced from deepwater, ultra-deepwater and high-pressure, high-temperature fields, where extraction costs are generally higher than those associated with conventional and mature fields.
Gas Price for ONGC and Oil India’s Older Fields
The pricing framework for gas produced from older fields operated by public sector companies such as Oil and Natural Gas Corporation (ONGC) and Oil India Ltd. will remain different.
For these fields, the price cap will continue at $7 per mmBtu. Companies producing gas from challenging fields are allowed to determine their marketing and pricing strategies within the maximum ceiling prescribed by the government.
The higher ceiling for difficult fields is expected to provide producers with greater pricing flexibility as extraction from deepwater and other technically challenging reserves involves higher costs.
The Petroleum Planning and Analysis Cell (PPAC) under the Petroleum Ministry has issued the notification confirming that the revised ceiling will remain applicable from October 1, 2026, to March 31, 2027.
APM Gas Price and New Well Premium
For October, the APM price applicable to gas from specified ONGC and OIL fields is $11.22 per unit. However, the actual price charged for this gas will remain restricted to the $7 per unit ceiling.
The APM pricing system applies to gas produced from older ONGC and OIL fields and is particularly relevant to sectors such as city gas distribution, fertiliser production and power generation.
The government has also allowed a 10 per cent premium over the prevailing APM price for gas produced from new wells in designated ONGC and OIL fields, subject to applicable conditions. With the APM price fixed at $7 per unit for October, gas from these new wells will be priced at $7.70 per mmBtu.
How Domestic Gas Pricing Has Changed
The government revised the pricing mechanism for gas from old fields in April 2023. Under the revised system, the price is linked to 10 per cent of the price of imported crude oil, while minimum and maximum price limits are also specified.
The maximum APM gas price was increased to $6.75 per mmBtu in April 2025 and subsequently raised to $7 per mmBtu in April 2026.
Natural gas is an important input for several sectors, including fertiliser manufacturing and electricity generation. It is also used by city gas distribution companies to supply CNG and piped natural gas (PNG) to consumers. As a result, changes in domestic gas prices can influence operating costs across these sectors.
The latest decision effectively allows producers operating challenging gas fields to charge a higher maximum price, while the ceiling for gas from mature ONGC and Oil India fields remains unchanged at $7 per mmBtu.
Disclaimer: The prices, dates and policy details mentioned in this article are based on the information provided in the source material and the cited government notification. Gas prices and applicable pricing policies may be revised by the government from time to time. Readers should refer to official Petroleum Ministry or PPAC notifications for the latest information.