India more than doubles price of locally produced gas
The Central Government on Thursday more than doubled the price of domestically produced natural gas for the six months beginning tomorrow (1 April), reflecting a surge in global prices The Petroleum Planning and Analysis Cell of the federal oil ministry announced the new prices today. This will raise the prices of gas sold to households, the power sector, industries and fertiliser firms, adding to overall inflation. As per a notification issued by the oil ministry’s PPAC, the price of gas from regulated fields of state-owned Oil and Natural Gas Corp Ltd and Oil India Ltd will rise to a record $6.10 per million British thermal unit from the current $2.90. The rate paid for difficult fields like deepwater will rise to $9.92 for April-September from $6.13 per mmBtu, the notification stated. India links prices of locally produced gas from old fields to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas. High natural gas prices will boost earnings of producer ONGC, Oil India Ltd and Reliance Industries. India’s annual retail inflation exceeded 6% for the second consecutive month in February.
Russia offers oil to India at $35/bbl discount from pre-war price
Russia is offering India steep discounts on the direct sale of oil as mounting international pressure lowers the appetite for its barrels elsewhere following the invasion of Ukraine, according to people with knowledge of the matter. The sanctions-hit nation is offering its flagship Urals grade to India at discounts of as much as $35 a barrel on prices before the war to lure India to lift more shipments, the people said, asking not to be identified discussing confidential deliberations. Headline Brent prices have risen about $10 since then, implying an even larger reduction from current prices. Russia wants India to take 15 million barrels contracted for this year just to begin with, they said, adding the talks are taking place at government level. Asia’s No. 2 oil importer is among a handful of nations that have been doubling down on Russian crude, defying international pressure and sanctions. Russian barrels have been flowing to Asia in greater volumes as buyers across Europe and the U.S. shun the supply following the invasion of Ukraine. India and China have been the key buyers. Russia has also offered rupee-ruble-denominated payments using Russia’s messaging system SPFS, that could make trading more attractive for India, they said. No final decision has been taken and the matter will probably be discussed when Russian Foreign Minister Sergei Lavrov arrives in India for a two-day visit Thursday. The direct purchase is expected to involve Russia’s Rosneft PJSC and the Asian nation’s biggest processor Indian Oil Corp., which have an optional term contract — that’s rarely used — for close to 15 million barrels a year. It’s not clear what the upper end of the buying might be, but India is thought to have limited appetite for the grades being offered.