New Delhi Under Pressure Over Gas Price Reform

摘要

Gas price reform in India was never going to be easy, but quite how big a challenge the government faces is now becoming clear. New Delhi announced in June that a new pricing mechanism would be introduced from April 2014, but resistance is mounting among opposition lawmakers and major consumers in the power and fertilizer sectors. Oil Minister Veerappa Moily is standing firm, but cracks are starting to appear in the government's hitherto united front (PIW Jun.10'13). The new price formula incorporates weighted average prices at US and UK trading hubs and netback prices for Japanese and Indian LNG imports, and is likely to almost double domestic gas prices to $8.40 per million Btu from their current $4.20-$5.70/MMBtu (PIW Jul.8' 13). The thinking behind these reforms is to encourage domestic gas exploration and production, and so reduce India's dependence on costly LNG imports.