October 8, 2020 12:36:38 am
The Union Cabinet on Wednesday announced a new e-bidding platform to promote market price discovery of natural gas produced from fields across a number of contractual regimes, where producers already have pricing freedom. Notably, this move will not impact the pricing of the majority of gas currently produced in the country under the administered pricing mechanism.
Experts say that 75-80 per cent of natural gas produced is priced by the government under the administered pricing mechanism. They did, however, note that the move would help boost incentives for gas producers to invest more in boosting natural gas production from new discoveries.
India currently produces 84 MMSCMD (million metric standard cubic meter per day) of natural gas and imports nearly the same amount. With the new reforms, 40 MMSCMD will come into local production. The country’s dependency on import of natural gas will reduce,” Union Minister Dharmendra Pradhan said while introducing the reforms.
The new policy will also grant marketing freedom to the field development plans (FDPs) of those blocks in which production sharing contracts (PSCs) already provide pricing freedom.
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