Crude prices surged in June after the Israel-Iran conflict stoked fears of supply disruption. It however erased all the gains following a ceasefire last week between the two countries.
The government revises the Administered Price Mechanism (APM) rate every month based on the average crude price of the preceding month. The price is set at 10% of the Indian crude basket, subject to a ceiling of $6.75 per mmBtu.
The gas price for July came to $6.89 per mmBtu based on the crude-linked formula but will be capped at $6.75, according to a notification by the oil ministry.
This price is applicable to gas produced by state-run Oil and Natural Gas Corp (ONGC) and Oil India. Higher prices are likely to boost earnings of oil producers while eating into the margins of city gas distributors and other users of domestic gas. -Our Bureau
