(CNBC)
In a bid to boost the natural gas sector, the government is looking to introduce a wave of reforms for the sector. The Ministry of Petroleum and Natural Gas has prepared a Cabinet note which proposes snapping the power sector’s priority access to cheaper gas, setting up a gas trading platform to encourage market discovery prices, the report said citing unnamed officials. The ministry also wants to break away from GAIL’s transportation unit to enhance third-party access to its pipeline, said the report.
India produces just half of the gas that it consumes at present while a government set formula determines the rates for most local gas and the absence of market price deters producers from investing in the country, the report said. “By allowing marketing freedom to gas from new discoveries, the government has tried to address much of the investors’ concerns in recent years but officials think developing a free market was essential to sustained investment in the sector,” an official.
