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An increase in gas prices in the international market and a reduction in Administered Price Mechanism (APM) gas allocation to city gas distributors (CGD) led to monthly gas volumes traded on the Indian Gas Exchange Limited (IGX) rising by 129 per cent sequentially to 5.7 million metric million British thermal units (mmBtu) in December, the company said on Tuesday. IGX is the only national-level gas exchange for the physical delivery of natural gas.
Global gas prices rose due to increased demand and supply concerns in international markets amid a strong winter in Europe and ongoing tensions with traditional supplier Russia. Geopolitical tensions in West Asia have also contributed to the price surge, with fears of skirmishes between Israel and Iran reigniting as US President Donald Trump assumes office on January 20.
The Gas Index of India (GIXI) for December stood at Rs 1,215 or $14.3 per Metric Million British Thermal Unit (MMBtu), marking a 10 per cent rise from November. All spot international gas benchmark prices also recorded increases compared to the previous month, IGX stated.
A total of 193 trades were executed during December, sharply up from 131 in November. The majority of trades were executed in the daily contract format (57), followed by monthly and weekly contracts, which recorded 54 and 29 trades, respectively. In the third quarter (October-December) of FY25, IGX traded 16.2 million MMBtu in gas volume, marking a 37 per cent quarter-on-quarter increase. During the first nine months of FY25, IGX traded a total of 40 million MMBtu in gas volume, representing a 24 per cent annual increase.
The most active delivery points for free market gas were Mhaskal in Maharashtra and Gadimoga in Andhra Pradesh for ceiling price gas. Dahej in Gujarat accounted for 17 per cent of the total volumes traded.
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The Centre had reduced APM gas allocation to CGD players by 20 per cent for two successive months until November last year. This reduction led city gas retailers to increase compressed natural gas (CNG) prices by Rs 2-3 per kg, as they had to replace the shortfall with more expensive non-APM gas or imported liquefied natural gas (LNG).
CGDs receive gas from older fields, termed regulated or APM gas, at prices determined by the government. In contrast, gas from new wells follows a pricing formula linked to Indian crude oil prices. Currently, there is a ceiling price of $6.5 per MMBtu for APM gas, which may increase annually by about $0.5 per MMBtu until 2027. Meanwhile, gas produced from new wells costs an additional $2 per MMBtu.
IGX offers gas trades at 15 delivery points, including Dahej, Hazira, Ankot, Mhaskal, Bhadbhut, Dabhol, KG Basin, Gadimoga, and Suvali. It operates across six regional gas hubs: Western Hub, Southern Hub, Eastern Hub, Central Hub, Northern Hub, and North Eastern Hub.
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