Latest news with #AdministeredPriceMechanism
Time of India
30-06-2025
- Business
- Time of India
July local natural gas price hits $6.75/MMBtu ceiling
Domestic natural gas price hit its ceiling of $6.75 per mmBtu in July, fuelled by a rise in global crude oil prices in June, to which it is linked. Crude prices surged in June after the Israel-Iran conflict stoked fears of supply disruption. It however erased all the gains following a ceasefire last week between the two countries. The government revises the Administered Price Mechanism (APM) rate every month based on the average crude price of the preceding month. The price is set at 10% of the Indian crude basket, subject to a ceiling of $6.75 per mmBtu. The gas price for July came to $6.89 per mmBtu based on the crude-linked formula but will be capped at $6.75, according to a notification by the oil ministry. This price is applicable to gas produced by state-run Oil and Natural Gas Corp (ONGC) and Oil India . Higher prices are likely to boost earnings of oil producers while eating into the margins of city gas distributors and other users of domestic gas. -Our Bureau Live Events
Time of India
27-06-2025
- Business
- Time of India
Domestic natural gas price to hit govt ceiling in July
Domestic natural gas price is set to rise to the government-set ceiling of $6.75 per mmbtu next month, from $6.41 currently, as the rate is linked to crude prices, which surged this month due to the Iran conflict. The Centre revises the Administered Price Mechanism (APM) rate every month based on the average crude price of the preceding month. The price is set at 10 per cent of the price of the Indian crude basket, subject to a ceiling of $6.75 per mmbtu. At June's average crude price of $70 per barrel, the effective rate for July will be $6.75 per mmbtu. Crude prices have started softening after a ceasefire between Iran and Israel earlier this week, and are currently hovering around $68 per barrel. If the average slips below $67.50 in July, the APM rate for August could fall below the ceiling. Since the government introduced the new pricing formula in April 2023, linking domestic gas to crude oil, prices have mostly remained at the ceiling - first $6.50, and later $6.75 per mmbtu - except in June, when lower crude prices brought the rate slightly down. Prior to April 2023, there was no ceiling price for natural gas, allowing consumers to benefit from lower prices. Under the new regime, prices have generally been higher, squeezing margins for gas distributors and industrial users, while rewarding gas producers.
Time of India
26-06-2025
- Business
- Time of India
Domestic natural gas price to hit govt ceiling in July
Domestic natural gas price is set to rise to the government-set ceiling of $6.75 per mmbtu next month, from $6.41 currently, as the rate is linked to crude prices, which surged this month due to the Iran conflict. The Centre revises the Administered Price Mechanism (APM) rate every month based on the average crude price of the preceding month. The price is set at 10% of the price of the Indian crude basket, subject to a ceiling of $6.75 per mmbtu. At June's average crude price of $70 per barrel, the effective rate for July will be $6.75 per mmbtu. Crude prices have started softening after a ceasefire between Iran and Israel earlier this week, and are currently hovering around $68 per barrel. If the average slips below $67.50 in July, the APM rate for August could fall below the ceiling. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Top 25 Most Beautiful Women In The World Articles Vally Undo Since the government introduced the new pricing formula in April 2023, linking domestic gas to crude oil, prices have mostly remained at the ceiling - first $6.50, and later $6.75 per mmbtu - except in June, when lower crude prices brought the rate slightly down. Prior to April 2023, there was no ceiling price for natural gas, allowing consumers to benefit from lower prices. Under the new regime, prices have generally been higher, squeezing margins for gas distributors and industrial users, while rewarding gas producers. Live Events
News18
18-06-2025
- Business
- News18
India's Oil & Gas Exploration: Reforms, Big Discoveries Pave Way For Viksit Bharat
Last Updated: As India builds its energy future, the last few years reflect a strategic, tech-forward, and investor-friendly pivot in upstream oil and gas India's exploration and production (E&P) sector has undergone a transformative journey in the past three-four years, getting a robust foundation built on improved data access, investor confidence, cutting-edge technology, and better access to capital. The government's decision to slash 'no-go" areas by a staggering 99% in 2022 opened up over 1 million square kilometers of India's Exclusive Economic Zone (EEZ) for oil and gas exploration, which marked a bold step towards energy security. In a landmark move in April 2023, the Centre revised the pricing mechanism for domestically produced natural gas. The new formula pegs prices to 10% of the monthly average of the Indian crude basket, updated every month. Additionally, new wells by ONGC and OIL are entitled to a 20% premium over the APM (Administered Price Mechanism) rate, which came as a shot in the arm for India's upstream sector. Backing this policy thrust is a Rs 3,200-crore drilling campaign launched in 2024, targeting four offshore stratigraphic wells across the Mahanadi, Bengal, Saurashtra, and Andaman basins to map India's untapped petroleum potential. A look at several highlights of the journey: KEY DISCOVERIES Oil India Limited (OIL) has made seven key discoveries, adding 18 MMTOE and over 2,700 MMSCM of gas reserves. Among the major basin-wise discoveries are: Mumbai Offshore Basin: Discoveries like Suryamani, Vajramani, Moti, Amrit show high initial production rates; Amrit alone holds 8.0 MMTOE of reserves. Mahanadi Basin: Konark and Utkal delivered major gas finds, with Konark accounting for 21 MMTOE. Cauvery Basin: The ultra-deepwater Chola-1 yielded 37.5 MMTOE, a standout discovery. Cambay Basin: Moderate oil and gas yields from PURN-1 and West Amod-1. In the east, post-2022 clearance from defence agencies, the Andaman offshore area was finally opened for E&P. Two wells have already been drilled in the region. A significant development in 2025 saw ONGC signing a Technical Services Agreement with bp, which will now serve as the technical partner for Mumbai High field. The goal: to stabilize declining production and achieve a 44% rise in oil output and 89% increase in gas production. As India builds its energy future, the last few years reflect a strategic, tech-forward, and investor-friendly pivot in upstream oil and gas. With a reformed regulatory landscape, landmark discoveries, and global interest reignited, the country is poised to unlock new hydrocarbon frontiers, laying the path for long-term energy resilience.
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Business Standard
17-06-2025
- Business
- Business Standard
Mahanagar Gas top pick among CGDs, Gujarat Gas least preferred: Nomura
Nomura on CGDs: Japan-based brokerage Nomura has reiterated its bullish view on Mahanagar Gas Ltd (MGL), upgrading the stock to 'Buy' from 'Neutral' and naming it the top pick among city gas distributors (CGDs). The upgrade is driven by MGL's robust volume growth outlook, limited exposure to the volatile industrial and commercial (I&C) segment, and attractive valuation. The target price has also been raised to ₹1,680 from ₹1,345 earlier. 'We prefer Mahanagar Gas (MAHGL IN, Buy) due to its highest expected volume growth among peers, limited exposure to volatile industrial and commercial (I&C) segments, and attractive valuation compared to peers. MGL is also better placed than IGL on EV-related regulatory challenges, in our view,' said Bineet Banka, research analyst at Nomura, in a note dated June 16. In contrast, Nomura has maintained a 'Reduce' rating on Gujarat Gas Ltd (GGL), citing intense competition in the I&C space, subdued volume growth prospects, and constrained pricing power. The target price for GGL has been cut to ₹406 from ₹470. For Indraprastha Gas Ltd (IGL), Nomura retained a 'Neutral' rating, with a revised target price of ₹210, up from ₹199. On the bourses, around 10:15 AM, Mahanagar Gas was trading 1.68 per cent higher at ₹1,413; Indraprastha Gas was down 0.38 per cent at ₹211.45; and Gujarat Gas was trading 0.45 per cent higher at ₹480.40. While the recent 18-20 per cent cut in Administered Price Mechanism (APM) gas allocation has emerged as a short-term headwind for CGDs, Nomura noted that companies have already initiated moderate price hikes of over 2 per cent in both the compressed natural gas (CNG) and domestic piped natural gas (PNG) segments to offset the shortfall. Among the three key players, Indraprastha Gas Ltd (IGL) has been most affected due to its high CNG exposure (about 73 per cent of sales). MGL, with a relatively balanced portfolio, is seen managing the disruption more effectively. GGL, on the other hand, has limited exposure (about 44 per cent) to the priority sectors impacted by APM cuts but faces its own set of challenges. Its considerable presence in the I&C segment (about 56 per cent of total volumes) is under pressure from low-cost propane, especially in Gujarat's Morbi ceramics cluster. With CNG adoption in new vehicles already high at around 31 per cent in the state—compared to 22 per cent in Delhi and Maharashtra—GGL also has limited headroom for growth in the CNG business. Catch Stock Market Updates Today LIVE State EV policies to weigh on CNG growth Nomura flagged policy developments around electric vehicles (EVs) as another important trend impacting the sector. While Delhi and Mumbai continue to tighten their EV policies to combat air pollution, MGL is seen as better positioned than IGL to navigate this transition. Mumbai's comparatively lower air pollution levels, combined with a policy focus that may initially target liquid fuels over CNG, could offer a temporary reprieve for MGL. Moreover, MGL's representation in the Maharashtra High Court-monitored EV committee indicates its proactive approach, with the management optimistic about CNG's role under the new state EV policy. Apart from that, a key catalyst across the sector, analysts said, could be the inclusion of natural gas under the Goods and Services Tax (GST) regime. Currently, gas is taxed under a patchwork of indirect levies like state VAT, central excise, and sales tax. Bringing gas under GST would streamline taxation, reduce cost burdens, and enable industrial customers to claim input tax credit—especially beneficial in price-sensitive regions like Morbi, where propane already enjoys GST benefits. Nomura believes GGL stands to gain the most from this reform, given its major I&C customer base. That said, Nomura prefers MGL for its superior volume outlook, low regulatory risk from EV policies, and attractive valuation. GGL is rated 'Reduce' due to demand headwinds in the I&C segment and a challenging competitive landscape, though GST inclusion remains a key upside risk.
