Govt cuts APM gas price for first time in 2 years
For the first time in two years, the government has reduced the price of natural gas used for producing CNG for vehicles and cooking gas, reflecting a decline in benchmark rates.
The price of natural gas from legacy fields allocated to state-owned
ONGC
without auction has been reduced from USD 6.75 to USD 6.41 per million British thermal units (mmBtu), according to a notification from the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC).
The reduction, which is the first since the government in April 2023 implemented a new formula to price such gas, will aid city gas retailers like
Indraprastha Gas Ltd
,
Mahanagar Gas Ltd
and Adani-Total Gas Ltd who had been reeling under cost pressures from rise in input cost.
In April 2023, the Union Cabinet accepted an expert committee report to price on a monthly basis the gas from legacy fields, called APM gas, at 10 per cent of monthly average import price of crude oil with a floor of USD 4 and a cap of USD 6.5 per mmBtu. The cap price was to remain unchanged for two years and rise by USD 0.25 annually thereafter. In line with this, the cap rose to USD 6.75 per mmBtu in April.
In the first two years, the price of gas using this formula ranged between USD 7.29 per mmBtu and USD 9.12 but the cap ensured that the rate were fixed at USD 6.50 per mmBtu. In April, the price according to this formula came to USD 7.26 per mmBtu but the final rate was USD 6.75 in line with higher cap.
In May, the price came to USD 6.93 but was capped to USD 6.75 for consumers.
Since there has been a fall in international oil prices in view of uncertain demand outlook, the Indian basket of crude oil averaged around USD 64 in May. Using this as a benchmark, the APM gas price came to USD 6.41 per mmBtu on gross calorific value (GCV) basis, according to PPAC.
"For gas produced by Oil and Natural Gas Corporation/Oil India Ltd from their nomination fields, the APM price shall also be USD 6.41 per mmBtu on GCV basis" for the period June 1, 2025 to June 30, 2025, PPAC said.
The fall in benchmark also means that the price of gas that
ONGC
produced from new wells in the APM fields would also come down.
The government had allowed ONGC to charge 12 per cent of the oil price for the gas coming from new wells it drills. The higher price was to make up for the capex incurred in drilling new wells.
As much as 5 million standard cubic meters per day of gas - or a 10th of all gas produced by ONGC - comes from new wells, according to industry sources.
APM gas is one produced by state-owned firms Oil and Natural Gas Corporation (ONGC) and
Oil India Ltd
(OIL) from fields that were given to them on nomination basis. This gas is the input that is used in the cooking gas piped to household kitchens as well as turned into CNG for running automobiles, making fertilizers and producing electricity.
Prior to April 2023, the price of gas produced from fields covered under the Administered Price Mechanism (APM) regime -- which accounts for 70 per cent of domestic gas production -- was determined semi-annually based on a formula that benchmarked it to average international prices at four gas trading hubs.
APM gas is provided to city gas distributors for supply to CNG and residential PNG segments, which together accounts for 60 per cent of their sales volume.
Subsequent to the April 2023 decision, APM gas prices are revised on a monthly basis but subject to ceiling and floor price. The ceiling price now is USD 6.75 per mmBtu and will rise by another USD 0.25 per mmBtu in April next year.
APM gas prices had seen wide fluctuations in the years running up to the April 2023 decision. From a low of USD 1.79 per mmBtu in 2021, to a high of USD 8.57 for the 6-month period ended March 2023.
The rate for difficult fields like KG-D6 of Reliance Industries has been set at USD 10.04 per mmBtu for six months beginning April 1 as compared to USD 10.16 in the preceding six months period, according to PPAC.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
41 minutes ago
- Indian Express
Lower duty on edible oils, nuts; target growth in spice, rice in US deal: Niti Aayog
India should offer concessions on agricultural products from US such as edible oils and nuts where domestic supply gaps exist, and explore duty concessions to boost high-performing exports — including shrimp, fish, spices, rice, tea, coffee, and rubber — in the US market during the Bilateral Trade Agreement (BTA) negotiations, a Niti Aayog working paper has argued. The need for calibrated negotiations on agricultural trade relations between India and the US arises as India has traditionally maintained relatively high tariffs on politically sensitive agricultural sectors to protect farmers, but the US, under President Donald Trump, has been aggressively pushing for greater market access and lower tariffs, posing a challenge for developing countries such as India. The working paper dated May said India can offer some concessions to the US in the 'import of soybean oil' to meet US demands to reduce the trade imbalance, without harming domestic production, as India is the largest importer of edible oil in the world and the US has a huge export surplus of soybean. 'Import soybean seed from US 'We should also explore the option of importing soybean seed and using it for extracting oil in the coastal areas, then selling the oil in the domestic market and exporting the meal, for which there is adequate overseas demand. This will avoid genetically modified (GM) feed entering the Indian market,' the paper, authored by Senior Adviser at NITI Aayog, Raka Saxena, and Member of NITI Aayog, Ramesh Chand, said. 'Similarly, corn may be imported for ethanol blending, and its by-products — like Distiller's Dried Grains with Solubles (DDGS) — can be entirely exported to avoid GM feed in the country. US corn is cheaper and can be used to meet India's biofuel targets without disrupting local food and feed markets,' the paper said. Notably, soybeans and corn are among the US top exports to China, where a trade war may affect agricultural trade between the two countries. According to a Reuters report, US soybean exports may drop 20 per cent and prices could plunge if the United States and China fail to resolve their trade dispute, limiting US soybeans from accessing their largest market. Ease US apple imports 'Indian producers already enjoy supply advantages in commodities like rice and pepper. High tariffs on such products by India, which are regularly exported by the country, can be easily lowered or even removed in the bilateral trade accord. Such tariffs are not relevant for trade with countries like the US,' the paper said. The Niti Aayog paper said India can consider lower tariffs on agricultural commodities where either domestic production is small or imports do not compete with domestic production due to different quality grades and seasons. 'For example, US apples sell at a premium price in Indian retail markets due to different quality, long shelf life, and off-season availability.' Boost exports of fish, spices & coffee 'India should negotiate more access to the US market for high-performing exports like shrimp, fish, spices, rice, tea, coffee, and rubber. India earns approximately $5.75 billion annually from agri-exports to the US. Expanding this through duty waivers or TRQs should be part of trade talks,' the paper said. The authors said that US is expected to remain a big market for export of surplus food from India and all efforts need to be made to keep favorable environment for export to US. 'This should include strategic opening for US imports into India to achieve larger gains in exports. The ongoing negotiations between the two countries for a bilateral trade accord seem to be the best option for resetting long term trade relationships'. 'Export basket should emphasize both, traditional products like fishery and rice sold in large volume and a large number of high value products, differentiated products, ethnic products, attribute-based products, health foods, processed food etc. which are individually small but cumulatively quite large,' the paper said. In the last 10 years, India's agricultural exports to the US grew nearly fivefold, from $1.18 billion to $5.75 billion and the share of the US in India's total agricultural exports saw a slight decline, dropping from 11.5 per cent in 2004 to 9.8 per cent in 2024. Meanwhile, India's agricultural imports from the US increased even faster, rising from $291 million in 2004 to $2,217.9 million in 2024. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
Indian Express
an hour ago
- Indian Express
US dismisses India's steel tariff challenge at WTO on legal, procedural grounds
The United States has rejected India's notice at the World Trade Organization (WTO), which proposed retaliatory action against the 25 per cent US tariffs on steel and aluminium, arguing that the tariffs were imposed on national security grounds. The US also pointed out procedural errors in India's case. In its note dated May 23, the US stated that India is wrongly treating the tariffs on steel and aluminium as safeguard measures. It clarified that these duties were imposed under US law (Section 232), which allows such action if imports are considered a threat to national security. This development is significant as US President Donald Trump on Friday announced a move to double import tariffs on steel to 50 per cent — a step Indian exporters have called 'unfortunate', warning that they have already lost $5 billion in exports due to earlier tariffs, and further hikes could deepen losses. 'The United States will not discuss the Section 232 tariffs under the Agreement on Safeguards as we do not view the tariffs as a safeguard measure,' the US told the WTO Council for Trade in Goods in response to India's challenge. In FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the US, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related goods. These exports now face sharply higher US tariffs, threatening the profitability of Indian producers and exporters. The US also claimed that India had committed procedural errors. 'India never acknowledged the United States' offer to discuss these tariffs in our response dated 16 April 2025. Accordingly, India has not complied with the obligations under the Agreement on Safeguards, the agreement that it mistakenly contends applies to the tariffs in question,' the US note said. Ajay Srivastava, former trade officer and head of the Global Trade Research Initiative (GTRI), said India now has several options. One is to launch a formal WTO dispute, not under the Safeguards Agreement, but under broader GATT rules, challenging the Section 232 tariffs as disguised protectionist measures. 'India could argue that the US is abusing the national security exception, referring to earlier WTO rulings that limit how Article XXI can be invoked. However, this legal path carries risks, as the US has a track record of disregarding WTO rulings on national security,' GTRI said. A more forceful approach would be for India to impose retaliatory tariffs on its own, even without WTO authorisation, Srivastava said. He noted that other countries such as the EU, Canada, and China have already done this in response to the US Section 232 tariffs, as a political signal of resistance. 'While this sends a clear message, it also risks US countermeasures and potential legal battles. GTRI believes that although India has legal and diplomatic options, it may decide not to act immediately,' Srivastava said. GTRI suggested that a pragmatic path would be for India to use the ongoing bilateral Free Trade Agreement (FTA) negotiations with the US as the main platform to resolve the issue. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
Time of India
an hour ago
- Time of India
Infosys promoters get Rs 2,330 crore as dividend
Bengaluru/Mumbai: Infosys promoters hold an impressive 54.2 crore shares, a stake so significant that the company's latest dividend payout at Rs 43 per share translated into a staggering Rs 2,330 crore, shared among them. Infosys announced a total dividend of Rs 43 per share, including an interim dividend of Rs 21 per share for the 2024-25 financial year. The total payout is a 52% jump compared to the Rs 1,527 crore dividend payout in the 2023-24 financial year. Its chairman, Nandan Nilekani, owns 4 crore shares, earning him Rs 175 crore in dividends. Infosys co-founder NR Narayana Murthy holds 1.5 crore shares, reaping Rs 65 crore in dividends. The other promoters include Kris Gopalakrishnan with nearly 3.2 crore shares and dividends of Rs 137 crore. Sudha Gopalakrishnan maintains the highest individual shareholding of 9.5 crore shares, resulting in dividend earnings of Rs 410 crore. Additionally, other promoters Asha Dinesh and Dinesh Krishnaswamy possess nearly 4 crore and 3.2 crore shares, receiving Rs 165.9 crore and Rs 139.7 crore respectively in dividends. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Blaina: If You Were Born Between 1945-1974 You Could Be Eligible For This British Seniors Read More Undo The next generation maintains substantial holdings. Narayana Murthy's son, Rohan Murty, owns 6 crore shares, yielding Rs 261.5 crore in dividends, while Akshata Murty's 3.8 crore shares earned Rs 167 crore. Effective 2024-25 financial year, the company continues its policy of returning approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends, buybacks, and special dividends. During the year ended March, on account of the final and special dividend for fiscal 2024 and interim dividend for fiscal 2025, the company incurred a net cash outflow of Rs 20,345 crore. The company returned approximately Rs 88,400 crore, which is 85% of the cumulative free cash flow for fiscals 2023-2024 through dividends and buybacks, in line with the capital allocation policy. Affluent heirs: High-net worth grandchildren The next generation maintains substantial holdings. Narayana Murthy's son, Rohan Murty, owns 6 crore shares, yielding Rs 261.5 crore in dividends, while Akshata Murty's 3.8 crore shares earned Rs 167 crore. The third generation of Infosys promoters is now emerging into the spotlight, with some of the grandchildren holding significant stakes. Among them, Nikita and Milan Shibulal Manchanda each earned Rs 26.3 crore in dividends, holding 61 lakh shares apiece. Tanush Nilekani Chandra received Rs 14 crore for his 33.5 lakh shares, while the youngest shareholder, Ekagrah Rohan Murty, earned Rs 6.5 crore in dividends from his 15 lakh shares.
