Pricing pressure

Gas pricing needs a long-term perspective

A steep decline in prices of natural gas is a cautionary tale of second-guessing demand-supply dynamics in a globally traded commodity. Prices of global gas and liquefied natural gas (LNG) have plunged and now trade below oil parity, meaning it is now cheaper for users to burn gas rather than oil. Prices of Dutch TTF, a European benchmark, US benchmark Henry Hub, and spot LNG prices have dropped by over 70 per cent from last year’s record levels. The price of spot LNG, a key fuel source for Indian businesses, soared 40-fold from a low of $2 per million mBritish thermal units (one mBtu is 1,000 Btu) in May 2020 to a high of $80/million mBtu in March 2022, before crashing to $13/million mBtu levels now. US Henry Hub, a key reference rate to set domestic gas prices, has declined to $2.50/million mBtu from close to $9/million mBtu last August.

TO READ THE FULL STORY, SUBSCRIBE NOW NOW AT JUST RS 249 A MONTH.

MONTHLY

₹ 249

Select

ANNUAL

₹ 1799

Select

Best Offer

SMART ANNUAL

₹ 1499

₹ 1799

Opt for auto renewal and save Rs 300

Select

What you get on Business Standard Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
Pick your 5 favourite companies, get a daily email with all news updates on them.
26 years of website archives.
Preferential invites to Business Standard events.