Government raises deepwater gas price ceiling to $9.89/MMBtu; APM gas cap at $7
The Indian government has increased the ceiling price for natural gas from difficult deepwater fields to $9.89 per MMBtu, effective October 2026. Meanwhile, the price cap for legacy fields operated by ONGC and OIL remains fixed at $7 per MMBtu to support priority sectors like power and fertilizer.
Why it matters
This policy adjustment aims to incentivize investment in technically challenging offshore energy projects while balancing the need for affordable fuel in critical domestic industries.
The government has raised the ceiling price for natural gas produced from difficult fields, such as the KG-D6 block of Reliance Industries and BP, to $9.89 per million British thermal units (MMBtu) for the six months beginning October 1, 2026, from $8.90 previously, while keeping the ceiling for gas produced from the legacy fields of state-run Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) at $7 per MMBtu.
The new ceiling for gas from deepwater, ultra-deepwater and high-pressure, high-temperature discoveries is applicable for the period from October 1, 2026, to March 31, 2027, according to a notification by the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry.
Gas produced from such difficult areas enjoys marketing and pricing freedom under the government's policy, but is subject to a government-notified ceiling.
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