Petroleum ministry to seek Cabinet approval for domestic gas trading hub

By: ENS Economic Bureau | New Delhi | Published: October 11, 2017 1:56 am
petrol price, Excise duty, dharmendra Pradhan, VAT, value added tax, Tax, economy, Fuel, vat on fuel, diesel, diesel price cut, Union Petroleum and Natural Gas Minister Dharmendra Pradhan

In what will help India adopt a better mechanism for price discovery of both domestic as well as imported gas, the petroleum ministry will seek the Union Cabinet’s approval for a domestic gas trading hub.

Stating this on Tuesday, petroleum minister Dharmendra Pradhan also said his ministry was in the process of creating an internal think-tank to assist in priority areas like foreign investment, moving towards gas-based economy, financing models, using technology and curbing hydrocarbon imports.

Members of the think-tank will be Daniel Yergin (IHS Markit), Chanda Kochhar (ICICI Bank), Vijay Kelkar (economist), Dev Sanyal (BP), Ashok Belani (Schlumberger), Vijay Swarup (ExxonMobil), K V Kamath (BRICS New Development Bank), Rahul Dhir (GTI Group) and Satish Pai (Hindalco).

Currently, the price of natural gas in the country is determined through a government-mandated formula that links the local price to rates prevailing in gas-surplus nations. However, long-term contracts for import of gas are linked to crude oil.

Pradhan added that though initially the formula-based pricing may remain, the country will move gradually towards a transparent price mechanism determined through the gas trading hub. He added that these are steps towards reaffirming India’s resolve to cut the carbon intensity of its gross domestic product. India plans to increase its gas use in the energy mix to 15 per cent from the current 6.5 per cent. The world average of gas use in the total energy consumption is 24 per cent.

India imports almost 60 per cent of its petroleum requirements. India also plans to double its network of pipelines to transport natural gas to 30,000 km within the next three-four years which will help in shifting to a gas-based economy, reduce greenhouse emissions and cut oil import. FE

For all the latest Business News, download Indian Express App

    Live Cricket Scores & Results