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With an aim to ensure stable pricing regime for domestic gas consumers, the Cabinet Committee on Economic Affairs (CCEA) has approved the revised domestic natural gas pricing guidelines for gas produced from nomination fields of ONGC/OIL, New Exploration Licensing Policy (NELP) blocks and pre-NELP blocks, where Production Sharing Contract (PSC) provides for Government's approval of prices. The new guidelines will also provide adequate protection to producers from adverse market fluctuation with incentives for enhancing production.

The price of such natural gas shall be 10% of the monthly average of Indian Crude Basket and shall be notified on a monthly basis. For the gas produced by ONGC & OIL from their nomination blocks, the Administered Price Mechanism (APM) price shall be subject to a floor and a ceiling. Gas produced from new wells or well interventions in the nomination fields of ONGC & OIL, would be allowed a premium of 20% over the APM price. 

These reforms are a continuation of the various initiatives taken by Government of India to protect the interests of consumers by reducing the impact of increase in international gas prices on gas prices in India by significantly increasing the domestic gas allocation to City Gas Distribution sector. The reforms will lead to significant decrease in prices of Piped Natural Gas (PNG) for households and Compressed Natural Gas (CNG) for transport. The reduced prices shall also lower the fertilizer subsidy burden and help the domestic power sector.