The new system for fixing the price of natural gas has been approved by the government. Anurag Thakur, Union Minister, announced to media following a cabinet meeting on Thursday that natural gas produced from inherited old fields, also known as APM gas, will be tied to crude oil price instead of gas pricing in surplus countries like the US, Canada, and Russia.
According to the oil secretary Pankaj Jain, this will reduce the price of compressed natural gas (CNG) by 6% to 9% and the price of piped natural gas (PNG) by 10%.
Why govt is taking such steps?
In a statement, the government mentioned India’s crude purchases and how much of them would be associated with setting the price of natural gas. “The price of such natural gas shall be 10% of the monthly average of Indian Crude Basket and shall be notified on a monthly basis,” the government stated. Natural gas prices will be 10% of the Indian Crude Basket’s monthly average, with monthly notifications.
the efforts to promote stable pricing in the system and give producers the protection they need from unfavourable market fluctuations. By 2030, India wants to raise the proportion of natural gas in its primary energy mix from the current 6.5% to 15%. The changes will increase the use of natural resources.
What are officials saying about this change?
According to a statement issued by the government and distributed through the Press Information Bureau, the reforms would aid in increasing natural gas usage and will help the country reach its net zero and emission reduction goals.
The new domestic petrol pricing recommendations that were approved by the Union Cabinet will be put into effect by the Petroleum Ministry on Friday, according to Prime Minister Narendra Modi, who called the Cabinet decision a good step forward for the industry. Hardeep Puri, the oil minister, said that the action will defend customers’ interests.
The prices at four gas trading hubs—Henry Hub, Albena, National Balancing Point (Britain), and Russia—are currently used to fix domestic gas prices every six months.