Government Raises Deepwater Gas Price Ceiling to $9.89 Per MMBtu; APM Ceiling Stays at $7

The government has increased the ceiling price for natural gas produced from difficult fields to $9.89 per MMBtu. The new rate will apply from October 1, 2026, through March 31, 2027, compared with the earlier ceiling of $8.90. 

The revised price applies to gas from deepwater, ultra-deepwater and high-pressure, high-temperature fields. Reliance Industries and BP’s KG-D6 block in the Krishna-Godavari basin is among the gas-producing areas covered by this category. 

Difficult-Field Gas Gets Higher Ceiling 

The difficult-field pricing system covers discoveries where producing gas is technically more challenging. The government introduced this separate mechanism to encourage investment in such domestic resources, with producers getting pricing and marketing flexibility. 

The higher ceiling will therefore remain in place for the six-month period announced by the government. 

APM Gas Ceiling Remains at $7 

The ceiling for gas from the legacy fields of ONGC and Oil India has not changed and remains at $7 per MMBtu. 

The government has notified an APM price of $11.22 per MMBtu for October. However, the price for these fields continues to be capped at $7 per MMBtu. 

New-Well Gas Can Be Priced Higher 

There is a separate provision for gas from new wells in the nomination blocks of ONGC and Oil India. Such gas can receive a 10% premium over the prevailing APM price, subject to the applicable ceiling. 

With the ceiling at $7, this puts the effective price at up to $7.70 per MMBtu. 

APM Ceiling Has Moved Up Since 2023 

The APM pricing system was changed in April 2023, when the price was linked to the monthly average crude oil import price and kept within a floor and ceiling. 

The ceiling was initially $6.50 per MMBtu. It increased to $6.75 in April 2025 and reached $7 in April 2026. 

Read More: RBI Revises Bank Shareholding Rules for Mutual Funds, Insurers and Pension Funds! 

Conclusion 

The new ceiling changes the pricing limit for difficult-field gas for the next six months, while the existing $7 cap continues to apply to legacy APM gas. 

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