Union Budget 2020 Live Updates: Pricing Of Domestically Produced Natural Gas To Be Made Transparent..., “To deepen the gas market in India further reforms will undertake to facilitate transparent price discovery and ease of transactions,” Sitharaman said. To facilitate better price discovery of domestically produced natural gas, the government plans to undertake further reforms to make natural gas pricing more transparent, Finance Minister Nirmala Sithraman said today while unveiling the union budget 2020.
“To deepen the gas market in India further reforms will undertake to facilitate transparent price discovery and ease of transactions,” Sitharaman said.
The minister added that the national gas grid will be expanded to 27,000 KM from 16,200 KM currently.
Domestically produced natural gas currently is not determined by the demand-supply dynamics. The country currently uses a formula to price domestically produced natural gas, revised bi-annually.
As per the formula, the domestic gas price is the weighted average price of four global benchmarks — the US-based Henry Hub, Canada-based Alberta gas, the UK-based NBP, and Russian gas. The domestic price is based on the prices of these international benchmarks in the prior year and kicks in with a quarter’s lag. It applies for six months.
The country’s upstream players have on many occasions voiced concerns on the country’s natural gas pricing formula for domestically produced gas and said that low prices for domestically produced gas are acting as a deterrent for monetization of various gas fields.
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