In this episode of the State of the Economy podcast, Prashant Vasisht, Senior VP and Co-Group Head, Corporate Ratings, ICRA Limited, joins businessline’s Rishi Ranjan Kala to talk about how India’s natural gas story is progressing post-introduction of the Kirit Parikh formula, which addressed the pricing of natural gas produced in the country.
Vasisht highlights how events like the Russia-Ukraine conflict have impacted global markets and sent liquefied natural gas (LNG) spot prices soaring. This led to increased prices for gas produced from legacy fields in India. The conversation delves into the implications of these price fluctuations on various sectors, such as oil and gas, fertilisers, petrochemicals, and chemicals. It also explores the impact on industries like automobiles, especially those relying on compressed natural gas (CNG), and the city gas distribution sector. The Indian government’s ambitious plans for expanding city gas distribution are also discussed.
Vasisht provides insights into India’s domestic gas production and consumption trends, emphasising the expected increase in domestic production in the coming years. He also discusses India’s efforts to secure long-term gas contracts to meet its growing demand.
Kala and Vasisht’s conversation touches on how the shift to EVs poses challenges for CNG suppliers. Balancing both options amid financial constraints and growing EV adoption is complex. Public transport corporations invest in EVs, potentially impacting CNG’s market share as EVs become more cost-effective. This transition presents a complex challenge in the transportation sector.
The podcast also explores India’s investments in floating storage and regasification units (FSRU) for LNG imports, considering the global competition for such vessels. The challenges of expanding LNG infrastructure and the need for further development are addressed.
Finally, the podcast addresses the government’s goal of increasing the share of gas in the energy mix to 15 per cent. Vasisht highlights the challenges, including infrastructure expansion, regulatory hurdles, taxation issues, and the need for uniform policies to promote gas consumption across various sectors. Listen in!
(Host: Rishi Ranjan Kala, Producer: Nabodita Ganguly)
About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups