‘Gas price should be right for both producers, consumers’

India needs to make more use of its domestic gas, and to do this it has to get the pricing right; only that will incentivise the investors, said Fatih Birol, Chief Economist at the International Energy Agency.

Talking to BusinessLine here today, he did not elaborate on the pricing formula that India should adopt, but said: “I think the prices in any country should be at a level which should provide incentives for the investors and also be affordable for consumers — industry or households. It is important to find the right balance.”

Gas price is a politically sensitive issue in India, with a direct bearing on consumers like households as also on electricity tariffs. The Centre recently revised the price for the indigenously produced natural gas in sync with the global prices. The new rate, effective April 1 and valid for six months, is set at $4.66 a unit (measured in million British thermal units) and is based on the gross calorific value. On whether gas prices should be de-linked from that of crude oil, Birol, who is IEA’s Executive Director designate, said: “In many countries we see such a de-linking — in the US, Europe, and some parts of Asia. There is a move towards this in certain other countries. But gas price still largely remains linked to oil.”

On renewables Pitching for clean energy, Birol said that India has set an ambitious target for itself. “I think it is good to have ambitious targets… If you work very hard, if you have strong policies, they are achievable,” he said cautioning that many countries that made big moves in renewables, faced problems with the network.

The IEA is to come out with a report by the end of the year that compiles the experiences of its members and based on this, the international body will provide recommendations to New Delhi on how to deal with the infrastructure bottlenecks in renewable energy.

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