Gas price increase puts at risk under-construction plants.

The government has finally notified an increase in gas prices. While this is good news for gas producers, the collateral damage on the power and fertiliser sectors will be substantial. The new formula will push up gas prices from the current $4.2 a million British thermal units (mBtu) to $8.4 an mBtu.

The new price regime will kick in from April 1 and be applicable for five years. Every quarter, prices will be reviewed and adjusted, depending on how global prices move. The obvious gainers of this are the gas producers.

BS