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Govt Hikes Deepwater Gas Price Ceiling to $9.89; APM Gas Cap Remains at $7
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CNBC TV18•05-10-2026, 07:38
Govt Hikes Deepwater Gas Price Ceiling to $9.89; APM Gas Cap Remains at $7
- •The government has increased the ceiling price for natural gas from difficult fields like KG-D6 to $9.89 per MMBtu for October 1, 2026, to March 31, 2027, up from $8.90.
- •The ceiling for gas from legacy fields of ONGC and Oil India Ltd remains capped at $7 per MMBtu, despite a notified APM price of $11.22 per MMBtu for October.
- •Gas from deepwater, ultra-deepwater, and high-pressure, high-temperature discoveries enjoys marketing and pricing freedom, subject to a government-notified ceiling.
- •The higher ceiling aims to provide relief to producers developing India's technically challenging offshore gas resources, which have higher production costs.
- •A 10% premium over the APM gas price, up to $7.70 per MMBtu, is allowed for gas from new wells of ONGC and OIL to incentivize investment in additional reserves and new production.
Key Questions Answered
The government has raised the ceiling price for natural gas produced from difficult deepwater fields, such as Reliance Industries and BP's KG-D6 block, to $9.89 per million British thermal units (MMBtu) for the six-month period beginning October 1, 2026.
The APM gas price cap for legacy fields operated by state-run ONGC and Oil India Ltd is maintained at $7 per MMBtu.
For gas produced from new wells in their nomination blocks, the government permits a 10% premium over the prevailing APM gas price, resulting in an effective price of up to $7.70 per MMBtu with the October APM price capped at $7.
