Gujarat Gas has sent price revision notice to its customers and according to sources the company in its notice has said that owing to international development, regasified LNG prices have increased substantially.
Now 70 percent of the sourcing for Gujarat Gas is in terms of spot LNG it has a higher exposure there, so they will be hurt if gas prices go higher.
Also there are challenges on the supply side and that is why Gujarat Gas has been constrained to restrict gas supplies to their customers. They are saying that supplies are constrained to 80 percent of the volume for the month, which means only 80 percent of the current volume will be charged at the prevailing prices.
If any customer wants to get more volume than what has been decided in terms of 80 percent volume, they will be charged at higher spot LNG prices. Now this means that they will be charged higher prices which are currently at around that $30 to 35 per MMBtu.
Watch the accompanying video of CNBC-TV18’s Sonal Bhutra for more details.