Page 34 - Policy & Economic Report - June 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Natural Gas Market

Natural Gas Price – Monthly Review

• Natural gas spot prices at the US Henry Hub benchmark averaged $3.12 per million British thermal
units (MMBtu) in May 2025. Henry Hub's natural gas prices declined for the third consecutive
month in May, falling by ~8.8%, m-o-m. Softer demand due to mild weather reduced heating
demand, thereby putting downward pressure on prices. At the same time, high storage levels
during the injection season kept the market well supplied. Despite the monthly decline, prices
were up by ~47.2%, y-o-y.

• Natural gas spot price at the Title Transfer Facility (TTF) in the Netherlands in Europe traded at an
average of $11.66 per MMBtu. The average Title Transfer Facility (TTF) experienced a moderate
gain in May, increasing by 0.6%, m-o-m. Prices rose earlier in the month, supported by a
combination of ongoing maintenance activities at key Norwegian facilities, which limited supply
availability, and the geopolitical risk premium that continued to provide a floor to prices.
However, lower seasonal demand and higher storage levels partially offset the gains. According
to data from Gas Infrastructure Europe, EU storage levels rose to 48.4% as of the end of May, up
from 39.5% in April, an 8.9 pp increase. Prices were up by 15.2%, y-o-y.

• Japan Liquefied Natural Gas Import Price averaged at $12.56 per MMBtu for May 2025. There is
a change of -0.9% from last month and 3.3% from one year ago.

• The Union Cabinet has approved a new formula for pricing of natural gas and imposed cap or
ceiling price on the same. Natural gas produced from legacy or old fields, known as APM gas, will
now be indexed to crude oil prices. From April 1 2023, APM gas will be priced at 10% of the price
of basket of crude oil that India imports. The rate such arrived at however will be capped at US$
6.50 per MMBTU. The price such arrived at will also have a floor of US$4 per MMBTU. As per
notification dated 31st March 2025, the APM gas price has been raised to US$ 6.75 per MMBTU,
up from US$ 6.50 per MMBTU.

• Further, in accordance with MoP&NG, Govt. of India, pricing freedom for gas being produced from
discoveries in Deepwater, Ultra Deepwater and High Pressure-High Temperature areas, the gas
price ceiling for the period 1st April, 2023 - 30th September, 2023 was notified as US$
12.12/MMBTU on Gross Calorific Value (GCV) basis as per notification dated 31st March, 2023. As
per notification dated 30th September 2023, Gas price ceiling was further revised for the period
1st October, 2023 – 31st March, 2024 was notified as US$9.96/MMBTU on Gross Calorific Value
(GCV) basis. Prices were further revised for the period 1st April, 2024 – 30th September, 2024 was
notified as US$9.87/MMBTU on Gross Calorific Value (GCV) basis as per notification dated 31st
March 2024. Accordingly, for the period 1st October, 2024 – 31st March, 2025 gas price ceiling was
further revised as US$10.16/MMBTU on Gross Calorific Value (GCV) basis as per notification dated
30th September 2024. Now, as per notification dated 31st March 2025, Gas price ceiling was further

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