Domestic natural gas prices are likely to be slashed by over 10 per cent to USD 5.02 per unit from April 1, hitting revenues of companies like ONGC and Reliance Industries.

The prices of natural gas are due to be revised from April 1, based on average rates at key international hubs. The new rate will be around USD 5.02 per million British thermal unit (mmBtu) as compared to the current price of USD 5.61, sources privy to the development said. On a gross-calorific value basis, the price will be around USD 4.67 per mmBtu as compared to USD 5.05 currently.

The BJP-led NDA government had in October 2014 used a new formula to fix price of almost all domestically produced natural gas at USD 5.61 per mmBtu for the period up to March 31. Rates for next six months are to be decided based on one year average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

So, rate for April 1 to September 30 would be based on average price at the international hubs during January to December 2014. Sources said the Oil Ministry is likely to announce the new rates sometime this week.