In one of the last reforms in the oil and gas sector, the government is set to free up pricing of all domestically produced natural gas that would help scale up local production from fields of ONGC, OIL, Reliance and Vedanta and help create a uniform gas market where the fuel is freely tradable on exchanges.
The development comes soon after the launch of country’s first online delivery-based gas trading platform – India Gas Exchange which is expected to play a big role in competitive price discovery for the natural gas that will come from different parts of the globe and from within India.
Government sources said that discussions on lifting price restrictions on locally produced natural gas have started again and soon a decision would be taken about the timing of the new reform initiative. The current timing is considered ideal to free up gas prices as oil market after witnessing extreme volatility in March and April have stabilised and prices have remained soft and stable.
A panel led by the NITI Aayog Vice Chairman has also suggested free-market pricing for natural gas produced from all fields to boost domestic output. Now with gas exchange also in place, the idea to expand on the idea of creating a gas based economy has gained strength: