The Cabinet Committee on Economic Affairs (CCEA) on Thursday revised the pure gas pricing pointers for gas produced within the nation the place Production Sharing Contract (PSC) offers for Government’s approval of prices. The Centre stated the transfer would guarantee steady pricing regime for home gas customers and would additionally present satisfactory safety to producers from opposed market fluctuation with incentives for enhancing manufacturing.
Announcing the choice, Union Minister Anurag Thakur stated the CNG and PNG prices would see a drop of ₹5 for a kilo in main cities. “This is a 10% decrease in the prices,” he stated.
“The reforms will lead to significant decrease in prices of piped natural gas (PNG) for households and Compressed Natural Gas (CNG) for transport,” the federal government stated.
“The reduced prices shall also lower the fertiliser subsidy burden and help the domestic power sector. With the provision of a floor in gas prices as well as provision for 20% premium for new wells, this reform will incentivise ONGC and OIL to make additional long term investments in the upstream sector leading to greater production of natural gas and consequent reduction in import dependence of fossil fuels.”
Currently, the home gas prices are decided as per the brand new Domestic Gas Pricing Guidelines, 2014 which have been accepted by Government in 2014.
The 2014 pricing pointers offered for declaration of home gas prices for a six-month interval primarily based on the amount weighted prices prevailing at 4 gas buying and selling hubs – Henry Hub, Albena, National Balancing Point (UK), and Russia for a interval of 12 months and a time lag of 1 / 4.
A Government launch stated the value of pure gas shall be 10% of the month-to-month common of Indian Crude Basket and shall be notified on a month-to-month foundation. “For the gas produced by ONGC & OIL from their nomination blocks, the Administered Price Mechanism (APM) price shall be subject to a floor and a ceiling. Gas produced from new wells or well interventions in the nomination fields of ONGC & OIL, would be allowed a premium of 20% over the APM price,” the Centre stated.Â
The Government stated it has focused to improve the share of pure gas in major power combine in India from present 6.5% to 15% by 2030. “The reforms shall help expand the consumption of natural gas and will contribute to achievement of target of emission reduction and net zero,” the discharge added.
