NEW DELHI: India will more than double the price of natural gas from Friday for the first half of this fiscal year, reflecting a surge in global prices, two sources familiar with the matter said, further stoking inflation in Asia’s third largest economy.

India will raise the price of locally produced gas from old fields for April-September to a record high $6.1 per million metric British thermal units (mmBtu) from the current $2.90/mmBtu, the sources said on Wednesday.

It will raise the ceiling price for gas produced from more challenging fields to $9.92 per mmBtu for April-September from $6.13 per mmBtu, they added.

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 prices will be applicable on a gross heat value basis.

The Petroleum Planning and Analysis Cell of the federal oil ministry will announce the new prices on Thursday.

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

The sources declined to be identified as they are not authorised to speak to the media. The oil ministry did not respond to a Reuters email seeking comments.

The move will raise the prices of gas sold to households, the power sector, industries and fertiliser companies, adding to overall inflation.

India’s annual retail inflation exceeded 6% for the second consecutive month in February.

Headline inflation could remain at elevated levels as fuel retailers from March 21 started a gradual increase in pump prices of gasoil and gasoline, after a gap of over four months, reflecting a spike in global prices.

DBS Bank says every $10 increase in the price of a barrel of oil lifts India’s consumer price index-based inflation by 20 to 25 basis points, widens the current account gap by 0.3% of GDP, and poses a downside risk of 15 basis points to growth.