The worth of pure fuel produced from troublesome areas like KG-D6 of Reliance Industries is more likely to be lower by about 14% from subsequent month in keeping with softening vitality costs, sources mentioned.
For the six-month interval beginning October 1, the worth of fuel from deep sea and high-pressure, high-temperature (HPTP) areas is more likely to be lower to round USD 10.4 per million British thermal unit from the present $12.12, they mentioned.
The authorities bi-annually fixes costs of the locally-produced pure fuel — which is transformed into CNG to be used in cars, piped to family kitchens for cooking and used to generate electrical energy and make fertilisers.
Two completely different formulation govern charges paid for fuel produced from legacy or previous fields of nationwide oil firms like Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), and for newer fields mendacity in difficult-to-tap areas, akin to deepsea.
Rates are fastened on April 1 and October 1 every year.
In April this 12 months, the system governing legacy fields was modified and listed to 10 per cent of the prevailing Brent crude oil worth. The fee was nonetheless capped at $6.5 per mmBtu.
Rates for legacy fields at the moment are selected a month-to-month foundation. For September, the worth got here to $8.60 per mmBtu however due to the cap, the producers would get solely $6.5.
Brent crude oil has averaged round USD 94 per barrel this month however charges will proceed to be capped at $6.5.
Sources mentioned the worth for troublesome space fuel continues to be ruled by the previous system that takes one-year common of worldwide LNG costs and charges at some international fuel hubs with a lag of 1 quarter.
International costs had fallen within the reference interval of July 2022 to June 2023 and so it’s going to translate into decrease costs for troublesome fields, they mentioned.
The worth for fuel from troublesome fields was lower to USD 12.12 per mmBtu for a month interval, starting April 1 from a file $12.46 earlier.
The international spurt in vitality costs after Russia’s invasion of Ukraine has led to charges of locally-produced fuel climbing to file ranges — $8.57 per million British thermal unit for fuel from legacy or previous fields and $12.46 per mmBtu for fuel from troublesome fields between October 2022 and March 2023.
On April 1, costs of fuel from legacy fields have been slated to climb to $10.7 per mmBtu utilizing the previous system. But the federal government modified the system and put a cap to maintain inflation underneath examine.
Rates of CNG and piped fuel for kitchens had risen by 70% due to the earlier fuel worth hike.
The ceiling worth covers the price of manufacturing of producers whereas defending customers, notably CNG customers, kitchens utilizing piped cooking fuel and fertiliser vegetation which had grappled with hovering enter prices.
India is aiming to develop into a gas-based economic system with the share of pure fuel in its major vitality combine focused to rise to fifteen% by 2030 from the present degree of round 6.3%.