Politics · India Bureau
India raises deepwater gas price cap to $9.89 per MMBtu
The government has increased the ceiling price for natural gas extracted from difficult offshore fields to $9.89 per million British thermal units for the October 2026-March 2027 period, while maintaining regulated pricing for legacy fields at $7 per MMBtu.
LSN India ·
India's petroleum ministry has raised the price ceiling for natural gas extracted from deepwater, ultra-deepwater and high-pressure, high-temperature (HPHT) discoveries to $9.89 per million British thermal units (MMBtu) for the six-month period beginning October 1, 2026. This marks an increase from the previous ceiling of $8.90 per MMBtu, according to a notification issued by the Petroleum Planning and Analysis Cell.
The higher ceiling applies to technically challenging offshore blocks such as the KG-D6 field operated by Reliance Industries and BP. These complex deepwater operations face substantially higher production costs compared to conventional onshore and shallow-water gas fields, making the price adjustment potentially significant for producer economics.
Under government policy, gas from these difficult exploration areas enjoys marketing and pricing freedom within the notified ceiling limits. In contrast, natural gas produced from legacy fields operated by state-run ONGC and Oil India Ltd remains subject to a regulated administered price mechanism (APM) cap of $7 per MMBtu for the same period.
The bifurcated pricing structure reflects the government's approach to incentivizing exploration and development of India's more technically demanding hydrocarbon resources while maintaining price controls on conventional production. The new ceiling rates take effect from October 1, 2026 and remain valid through March 31, 2027.