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NEW DELHI, Sept 30 (Reuters) - India on Friday said it will raise the price of locally produced gas from old fields by 40% to a record $8.57 per million metric British thermal units (mmBtu) from Saturday for six months, a move that could stoke inflation.

The country will raise the ceiling price for gas produced from more challenging fields to $12.46 per mmBtu for October-March, the second half of this fiscal year, from the current $9.92 per mmBtu, a government statement said.


The prices will be applicable on a gross heat value basis.

India's annual retail inflation rate accelerated to 7% in August and has stayed above the Reserve Bank of India's mandated 2-6% target band for eight consecutive months.

The hikes will push up prices of gas sold to households, the power sector, industries and fertiliser companies, which could add to overall inflation.

High natural gas prices will boost earnings of producers Oil and Natural Gas Corp Ltd, Oil India Ltd and Reliance Industries.

India links prices of locally produced gas from old fields to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas.

The federal oil ministry has formed a panel to review the pricing formula for locally produced gas to ensure a "fair price to the end consumer." (Reporting by Nidhi Verma; Editing by Mark Porter)





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