The Oil and Natural Gas Corporation (ONGC) has said that the Ministry of Petroleum and Natural Gas (MOP&NG) has announced a 20% premium on gas produced from new wells or well interventions.

What Happened: As per the domestic gas pricing guidelines, the domestic natural gas price (APM Price) is fixed at 10% of the Indian crude basket price. The new directive allows for a 20% premium over APM prices for gas produced from new wells or well interventions in the nominated fields of ONGC or Oil India Limited.

“The enhanced price for new gas will make the new gas development projects viable and help the ONGC to augment the production of Natural Gas from nominated fields in challenging areas that require a higher amount of capital and technology," the company said in the press release.

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ONGC has already approved two major projects, the Daman Upside Development project and the integrated development of 4 contract areas under DSF -II, with a combined cost of approximately ₹13,800 crore. These projects are expected to increase domestic gas production and align with the national vision of raising the share of natural gas in India’s energy basket from 6% to 15% by 2030.

On the other hand, the Oil Ministry has reportedly approached the Finance Ministry asking for the withdrawal of windfall tax on petroleum products due to a reduction in crude prices.

Price Action: Shares of ONGC and Oil India soared after the news broke.

ONGC was trading 2.71% higher at ₹341.55, Shares of Oil India jumped 3.97% to ₹669.50.

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