India has mandated state-owned GAIL (India) Limited to import and procure gas from local hard-hit areas to meet the growing demand from the domestic and transport sectors in the form of cheaper supplies.
see photosIndia has made it mandatory for the state-owned GAIL (India) Limited to import gas into the country.
India has mandated state-run GAIL (India) Ltd to import gas to meet the growing demand from the domestic and transport sectors and to procure it from local difficult areas as cheaper supplies from old blocks are sufficient, a government order said. Not there.
City Gas Distributors (CGDs) have set up sales networks across the country for transportation and supply of gas to households, in line with Prime Minister Narendra Modi’s objective to increase the share of gas in India’s energy mix from 6.7% to 15% by 2030. excited by.
These companies get priority in the semiannual allocation of gas from older fields, which are sold at an affordable rate of $6.1 per million British thermal units (mmBtu), and the shortfall is met through imports.
Distribution companies pass on the cost of procuring gas to their customers, leading to different pricing of the fuel in the country.
Now, the oil ministry has asked GAIL to buy gas produced from farms in difficult areas at the maximum price fixed by the government or the actual price, whichever is lower.
The current maximum price for gas from difficult areas is $9.92/mmBtu, which is lower than spot prices for liquefied natural gas.
“For any further requirement, GAIL will also source long-term regasified liquefied natural gas, failing which RLNG can be spotted”, the order said, arriving at a uniform base price of the fuel across India. For mixing with domestic gas.
Bhanu Patni, senior analyst at Fitch Group company India Ratings & Research, said the current gas allocation in the transportation and domestic sectors is around 19 million cubic meters per day (MCMD), while the demand is around 21 MCMD.
“Gas pooling will spread the risk of higher prices evenly to all customers and create equal opportunities for distributors,” Patni said.
At present, the base price of gas is lower in areas with low demand growth as there is less dependence of distributors on imported gas.
The new rules allow quarterly allocation of gas to the transport and domestic sector based on demand in the last three months as compared to the existing norm of allocation in April and September.
Two government sources said the new rules for gas supply in the transport and domestic sectors will come into effect from May 16. The oil ministry did not respond to Reuters’ request for comment.
0 notes
The order states that GAIL will supply an additional 2.5% of gas for the geographical area to increase demand.
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