The ongoing rupee surge coupled with continuing price reductions of gas will push fuel cost down by around 5 percent, which in turn will lower the gross margins of upstream oil and gas players and deter fresh investment into the sector, says a report.

For the fifth consecutive time since implementation of the domestic gas pricing formula in November 2014, the government in March lowered domestic gas prices by 0.8 percent to $2.48 per million British thermal units (mmbtu). The price will be in force from April 1 to September 30, 2017. This came even as the average Henry Hub gas prices rose 12 percent y-o-y to $2.52/mmbtu during the same period.

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