Using prevailing price in gas surplus nations like the US, Russia and Canada, the government had in October last year announced a new pricing formula that led to rates rising by about 33 percent to USD 5.61 per million British thermal unit (mmBtu) for a period up to March 31, 2015 from the long-standing price of USD 4.2.
    
The rates, on net calorific value (NCV) basis, dropped to USD 5.05 per mmBtu for six month period beginning April 1, 2015.
    
"Preliminary calculations based on average price in the gas hubs stated in the formula indicate that the rate from October 1 is likely to be USD 4.16 or USD 4.17 per mmBtu on NCV basis," an Oil Ministry official said.
    
On gross calorific value (GCV) basis, the rate will be about USD 3.8 per mmBtu as compared to USD 4.66 currently.
    
"These are preliminary calculations and final numbers may vary by a few cents but the general trend is that prices will fall," he said.
    
The October 1 price cut will be the second reduction in rates ever - the first being on April 1.
    
While the cut will impact the revenue of producers like Oil and Natural Gas Corp (ONGC) and Reliance Industries, it will bring gains for users in the power and fertiliser sector in the form of lower feedstock cost.

 

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