India reduced the price of locally produced natural gas by 18% for six months beginning Oct. 1, hurting producers, including Oil & Natural Gas Corp., Oil India Ltd. and Reliance Industries Ltd. The price will be cut to $3.82 per million British thermal units based on the gross heat value, according to the country's Oil Ministry, Bloomberg reported. Rates were fixed at $4.66 per million Btu for the last six months. The price based on the net heat value will be $4.24, an oil ministry official, who asked not to be identified because of rules, told reporters in New Delhi on Wednesday. The reduction will squeeze profit margins at explorers such as Reliance Industries and state-owned ONGC, while benefiting power producers and fertilizer makers. Low prices may deter exploration companies from investing and increasing output, essential for Indian Prime Minister Narendra Modi’s target of cutting dependence on imported energy to 50% by 2030 from 80% now.
