Government-dictated price for natural gas produced by companies such as ONGC is likely to inch up marginally to USD 1.82 next week while the same for difficult fields like one operated by Reliance-BP may fall below USD 4, sources said.The price of gas, which is used to generate electricity, make fertiliser and convert into CNG for automobiles and cooking gas for households, is due to bi-annual revision next week.The rates paid for gas produced from fields given to Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) are most likely to go up to USD 1.82 per million British thermal unit for six month period beginning April 1 from a decade low of USD 1.79 currently, two people aware of the matter said.Simultaneously, the price for gas produced from difficult fields such as deepsea, which is based on a different formula, is likely to fall below USD 4 per mmBtu from the current price of USD 4.06.This is the maximum price that Reliance Industries Ltd and its partner BP plc are entitled to for gas they produced from deepsea blocks they won under New Exploration Licensing Policy (NELP).While the government sets the price of gas produced by ONGC from fields given to it on a nomination basis, it bi-annually announces a cap or maximum price that operators who won exploration acreage under NELP can get.The operators are supposed to do a market price discovery by seeking bids from users but that rate is subject to the price ceiling announced by the government, they said.Reliance-BP had in recent price discovery for new gas from their Krishna Godavari basin block, got rates of over USD 6 per mmBtu but they would get less than USD 4 as per the pricing formula.Natural gas price is set every six months — on April 1 and October 1 — each year based on rates prevalent in surplus nations such as the US, Canada and Russia.At the last revision, the price was cut by 25 per cent to USD 1.79 per mmBtu for six months beginning October 1 from USD 2.39. This is the third straight reduction in rate in one year. The price was cut by a steep 26 per cent to USD 2.39 in April last year.The rate paid to producers of new gas from difficult fields such as deepsea was cut to USD 4.06 per mmBtu from USD 5.61.The rate from October 1 is equivalent to the price paid to ONGC and Oil India Ltd (OIL) prior to May 2020 when formula-based pricing was first introduced.ONGC, sources said, had posted Rs 4,272 crore loss on gas business in 2017-18, which is likely to widen to over Rs 6,000 crore in the current fiscal (April 2020 to March 2021), they said.ONGC has seen incurring losses on the 65 million standard cubic meters per day of gas it produces from domestic fields shortly after the government in November 2014 introduced a new gas pricing formula that had “inherent limitations” as it was based on pricing hubs of gas surplus countries such as the US, Canada, and Russia.Sources said ONGC in a recent communique to the government has stated that the break-even price to produce gas from new discoveries was in the range of USD 5-9 per mmBtu.In May 2010, the government had raised the rate of gas sold to power and fertiliser firms from USD 1.79 per mmBtu to USD 4.20. ONGC and OIL got USD 3.818 per mmBtu price for the gas they produced from fields given to them on a nomination basis and after adding a 10 per cent royalty, the fuel cost USD 4.20 per mmBtu for consumers.The Congress-led UPA had approved a new pricing formula for implementation in 2014 that would have raised the rates but the BJP-led government scrapped it and brought a new formula.The new formula takes into account the volume-weighted annual average of the prices prevailing in Henry Hub (US), National Balancing Point (the UK), Alberta (Canada), and Russia with a lag of one-quarter. Prices are set every six months — on April 1 and October 1 each year.The rate at the first revision, using the new formula, came to USD 5.05 but in the subsequent six-monthly reviews kept falling till it touched USD 2.48 for April 2017 to September 2017 period.Subsequently, it rose to USD 3.69 in April 2019-September 2019 before being cut by 12.5 per cent in October 2019 to USD 3.23.