India cuts gas prices by 18%

The well-head gas price has dropped to $3.82/m British thermal units (Btu) which could discourage investment in the fields

India has cut the well-head gas price by 18% to $3.82/m British thermal units (Btu), squeezing producers such as Oil & Natural Gas Corporation (ONGC), Oil India and Reliance Industries. The move may end up discouraging investments in new fields, which would eventually lead to higher dependence on costlier imports as lower prices boost demand, warned ratings agency Moody’s. Low prices benefit power producers and fertilizer makers, but may deter exploration companies from investing and increasing output, essential for Prime Minister Narendra Modi’s target of cutting India’s dependence on imported energy to 50% by 2030 from 80% now. India imports 36% of its gas needs. But "imports will cont