As per a notification issued by the oil ministry’s Petroleum Planning and Analysis Cell, price of the gas procured from regulated oil fields of Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL) is expected to rise to a record $6.10 per million British thermal unit from the current rate of $2.90 for the period April-September 2022.

The increase in natural gas prices will be boosting the profitability of rated Indian upstream companies and will further support their investment spending and shareholder distributions. For OIL in particular, the high gas prices will add a buffer to the company’s credit metrics for supporting its capacity expansion capex. For Reliance Industries Limited (RIL) and ONGC, the gas production will benefit from the increase in price ceiling.