Economy

High-level committee proposes higher gas price for existing/new discoveries

Twesh Mishra New Delhi | Updated on May 21, 2019 Published on May 21, 2019

If accepted, the proposal will help boost gas production

A high-level committee  appointed by the Ministry of Petroleum and Natural Gas has recommended a higher natural gas price  for producers from existing discoveries among measures to bring down India’s dependence on crude oil imports.

“There are some gas fields where gas production can be started if a better price is offered to them. To boost domestic production of natural gas, the committee has recommended a more remunerative price for (both new and existing) marginal/deep sea gas discoveries,” Anil Kakodkar, an eminent scientist and one of the two members of the committee, told BusinessLine.

The recommendation is significant as  at present only new difficult discoveries have been allowed a higher price of natural gas by the Ministry. The committee recommendation covers those discoveries that have been awarded under  the New Exploration Licence Policy (NELP) and pre-NELP regimes.

“The committee essentially focused on three issues. These are the continuous increase in import bill, sustainability as well as energy security and climate change…The committee has recommended a shift to a gas-based economy in line with the global trends as the outlook for gas is better.  At present, natural gas has a 6 per cent share  in India’s energy basket while the global average is around 24 per cent,” Kakodkar said.

Sidharth Pradhan, an expert on financial and tax issues, is the second member of the committee.

Use of biofuels

“The committee has also recommended increasing the use of bio mass, essentially surplus agricultural residue, for harnessing bio fuels. We have also recommended seeking more means for developing bio crude, bio fuels and bio gas…The committee has made major recommendations to accelerate domestic research to commercialise indigenous resources to enhance hydrocarbon supply,” Kakodkar added.

An official statement said  the committee has clearly brought out the strategy to reduce the import dependency of the nation in the report and has recommended short-term, medium-term and long-term strategies.

The Ministry of Petroleum and Natural Gas will consider the recommendations submitted by the committee while formulating policies to bring down imports, the statement added.

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Published on May 21, 2019
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