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India asks GAIL to import LNG to meet rising city gas demand
India has mandated state-run GAIL (India) Ltd to import gas and buy from local difficult fields to meet growing demand growth from household and transport sectors as cheaper supplies from old blocks is not enough, a government order said.
City gas distributors (CGD) have set up sales network to supply gas to transport and households across the country, buoyed by Prime Minister Narendra Modi’s aim to raise the share of gas in India’s energy mix to 15% by 2030 from 6.7% now.
These companies gets a priority in half yearly allocation of gas from the old fields, sold at a cheaper rate of $6.1 per million British thermal units (mmBtu), and the shortfall is met through imports.
The distribution companies pass on the costs of gas purchases to their customers leading to differential pricing of fuel in the country. Now, the oil ministry has asked GAIL to buy gas produced from the fields in difficult areas at the ceiling price fixed by the government or actual price which ever is lower.
The current ceiling price of the gas from difficult fields is $9.92/mmBtu, lower than the spot prices of the liquefied natural gas
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