The decline in administered price mechanism (APM) gas to the city gas distribution (CGD) companies drove up volume and prices on a monthly basis during December 2024 at the Indian Gas Exchange (IGX).

IGX traded 5.7 million mBtu, or 144 million standard cubic meters (MSCM) gas volume, which was higher by 129 per cent on a M-o-M and by 54 per cent Y-o-Y.

“Increase in gas prices in the international market, reduction in CGD APM gas allocation resulted in growth in trade volumes,” IGX said.

The Gas IndeX of India (GIXI) for December 2024 stood at ₹1,215 ($14.3) per mBtu in December 2024, up by 10 per cent from last month. The LNG benchmark index—West India Marker (WIM)—Ex Dahej stood at around $15.3 per mBtu (up 1 per cent M-o-M).

Spot international gas benchmark prices also recorded higher compared to last month. Henry Hub at around $3.4 per mBtu (up 15 per cent M-o-M) and TTF (Netherlands) at $13.8 (Flat M-o-M).

The gas prices continued upward trajectory due to increased demand and supply concern in international markets amid winters and geopolitical issues, the exchange pointed out.

During the month, the exchange traded gas deliveries stood at 2.7 million mBtu, around 2.2 million standard cubic meters per day (MSCMD).

Around 47 per cent of the trade volume was free market gas, while 53 per cent was domestic gas HPHT gas at ceiling price (₹863 or $10.16 per mBtu) and 0.53 million mBtu pricing freedom at Bokaro (CBM), Jaya, ONGC Hazira & KG Basin delivery points.

For the third quarter of FY25, IGX traded 16.2 million mBtu of gas volume, marking a 37 per cent Q-o-Q growth. During the first nine months of the fiscal year, a total of around 40 million mBtu volume was traded, representing an increase of 24 per cent on an annual basis.

On reduced allocation to CGD firms, Fitch Ratings said in a recent report “We believe CGD companies may raise prices for piped natural gas (PNG) and compressed natural gas (CNG) in the near term, as they try to cover the shortfall in domestically produced input gas with gas from more expensive deep-water offshore fields and LNG imports.”

This follows the government cutting its allocation of the domestic APM natural gas to CGD companies in November 2024, given the consistent decline in production from such fields in recent years. PNG and CNG have historically received the highest share of such domestic gas.