The reforms will help expand consumption of natural gas (Representational)
New Delhi:
The government has approved a new methodology for fixing the price of natural gas. Union minister Anurag Thakur told reporters after a cabinet meeting on Thursday that natural gas produced from conventional old fields, known as APM gas, would now be sold instead of gas prices in surplus countries like the US, Canada and Russia. linked to the price of crude oil.
This will make piped natural gas (PNG) cheaper by 10 per cent and the cost of compressed natural gas (CNG) by 6 per cent to 9 per cent, Oil Secretary Pankaj Jain said on Thursday.
The government will issue a notification on Friday to announce this change and the decision will come into effect from Saturday.
“The price of such natural gas will be 10 per cent of the monthly average of the Indian crude basket and will be notified on a monthly basis,” the government said in a statement. Along with fixing the price of natural gas.
#Almirah Revised Domestic Gas Pricing Guidelines approved
Natural gas price to be notified monthly at 10% of the monthly average of the Indian crude basket
Take steps to ensure stable prices in governance and provide adequate protection to producers from adverse market movements pic.twitter.com/NRONPAOzzK
— Rajesh Malhotra (@DG_PIB) April 6, 2023
India is targeting to increase the share of natural gas in the primary energy mix from the current 6.5 per cent to 15 per cent by 2030. The reforms will help to expand the consumption of natural gas and contribute to the reduction of emissions and achieving the target of clean. Zero, the government said in a statement issued through the Press Information Bureau.
The Petroleum Ministry will issue a notification on Friday to implement the new domestic gas pricing guidelines approved by the Union Cabinet
Oil Minister Hardeep Puri tweeted that the move would protect the interests of consumers.
Shri Puri said, “Continuing with the various initiatives taken under the leadership of Prime Minister Narendra Modi to protect the interests of consumers by mitigating the impact of increase in international gas prices on gas prices in India, the Union Cabinet has revised Domestic gas pricing guidelines have been approved. Said.
In continuation of the various initiatives taken under the leadership of PM Shri @narendramodi To protect the interests of consumers by mitigating the effect of increase in international gas prices on gas prices in India. #central cabinet Revised Domestic Gas Pricing Guidelines approved! pic.twitter.com/nKX44eiW46
— Hardeep Singh Puri (@HardeepSPuri) April 6, 2023
At present, domestic gas prices are fixed every six months based on prices at four gas trading hubs – Henry Hub, Albena, National Balancing Point (UK) and Russia.
The government said that the pricing methodology based on four gas hubs had significant time lag and high volatility, hence the need for this reform was felt.
“The revised guidelines make crude oil linked prices, now the practice adopted in most industry contracts, more relevant to our consumption basket and deep liquidity in global trading markets,” the government said.