International Energy Agency (IEA) and Ministry of Petroleum and Natural Gas of India, today organized a joint webinar on “Building a Natural Gas‑Based Economy in India Amidst a Changing Global Gas Market Landscape”. The Workshop, inaugurated in the presence of Minister of Petroleum and Natural Gas &Steel Shri Dharmendra Pradhan, and Executive Director of IEA Dr. Faith Birol, brought together international experts on gas sector and relevant stakeholders across the Indian energy ecosystem,

In his inaugural address,ShriPradhan said that India is all set to emerge as one of the primary drivers of growth in gas demand in Asia, despite the pressing Covid-19 challenges, owing to a combination of Government’s pursuance of consistent policies and initiatives, as well as fast developing pipeline infrastructure.He said that in order to give a fillip to the gas based economy, focus is being given to enhancing domestic gas production, expeditious development of gas infrastructure as well as development of Gas market by providing open access to gas infrastructure. On creation of free gas market, the Minister said that the Government is progressively moving towards a marketing and pricing freedom regime in the country. Gas grid is being expanded to new markets in eastern and north-eastern part of the country with Government’s supports of capital grants for Pradhan Mantri Urja Ganga (PMUG) and Indradhanush North Eastern Gas Grid projects. Coverage of City Gas projects is being expanded to 232 Geographical Areas (GAs) spread over more than 400 districts, with a potential to cover about 53% of the country’s geography and 70% of country’s population. He said that all these steps support the vision of Hon’ble Prime Minister to usher a gas-based economy in the country.

The Minister said that with a view to further facilitate conducive business environment for competitive gas markets, efforts are underway to rationalise gas pipeline tariff structure for improving the affordability of gas across the country and for attracting investments into the gas infrastructure. The present zonal tariff structure for the gas pipelines results into additive tariffs for usage of multiple pipelines to transport natural gas from the distant gas supply sources. It causes wide disparity in pipeline tariffs particularly for the buyers located distant from the gas sources and thus it hinders the development of new gas markets/ demand centres in far flung and remote areas. 

Shri Pradhan said to create a level playing field among gas consumers located in far/remote areas,the existing zonal tariff structure is currently being reviewed to make it rational and competitive. The new tariff structure would facilitate in creating a single gas market by attracting investment to complete Gas Grid as well as ensuring equitable access to natural gas across the country. Gas based industries would benefit, with new tariff structure which would improve gas affordability across the country. Further, simplified tariff structure would also encourage gas industries to utilize the opportunity of procuring their gas requirement through Gas Trade Exchange(s) platform based on market mechanism. A level playing field among industries would promote in minimizing their input cost and improve competitiveness in global production chain. Apart of industries, new rationalised tariff structure would also give a boost for expeditious development of CGD projects and PNG/CNG services to the citizens.

In his remarks, Dr Birollauded the efforts of Government of India in providing energy access and energy availability to its people and said that on a longer term basis, India will be at a centre stage of all global energy players. He further said that India has set a very ambitious target of increasing the share of natural gas from 6 % to 15 % by 2030 in India’s energy mix, and on the road to achieve the target through market reforms, enhancing infrastructure and capacity building.

India and IEA have been cooperating across a range of areas, including oil security, energy efficiency, statistics and technology since India became Associate Country of IEA in March 2017.The workshop is the first collaborative activity between the IEA and the Ministry of Petroleum and Natural Gas in the realm of a gas-based economy. The genesis of this collaboration can be linked to the launch of first In-depth Review of India’s Energy Policies by IEA in January 2020, wherein IEA had lauded Government of India’s efforts to increase the share of Gas in India’s energy mix and provided recommendations to support the Government’s goals of promoting well-functioning energy markets.

The collaboration of India and IEA in the natural gas sector are intended to develop relevant knowledge sharing and experiences on a range of issues including natural gas infrastructure, regulation and gas hub development to help facilitate India’s national effortsto increase the share of natural gas in the energy mix and strengthen India’s energy security.

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YB