- The government can give a shock to gas consumers
- Gas companies are incurring losses at current prices
LPG consumers a big shock
New Delhi, it seems the government is going to shock consumers with domestic gases. In fact, the government is well aware that for the growth of the country’s economy, it will be necessary to change the formula for fixing domestic gas prices to increase the current 7 percent share of gas consumption to 15 percent by 2030. It is obvious that for this, the government wants to change something in the way of fixing the price of natural gas to be extracted in the country so that the cost of producing companies can be extracted.
The intention of the government seems to be that it wants to change the current way of fixing the price of gas coming out of Indian natural resources on the basis of market price like Japan-Korea. With this, the price of gas in the country wants to be increased to $ 4 per MMBtu (ie per million British thermal units – measuring gas). But on the other hand, it can also have an impact on the production cost of urea and other fertilizer. But the government’s intention is to attract more and more investors in the domestic sector in the country.
Let me tell you, the current method of fixing the price of domestic gas in our country is in force since 2014. Accordingly, the price of gas is revised every six months, according to which the price is currently fixed at $ 2.39 per MMBtu. However, these prices are determined according to the prices of gas in the international market. But given the way in which the gas prices have fallen in the past, it is expected that from October 1, 2020, the gas prices of domestic companies (ONGC, OIL, Reliance, Vedanta, etc.) are at their lowest level Can go up to $ 1.90 per MMBtu.
Given that domestic gas prices are continuously falling, all the companies gave a presentation in front of the Petroleum Ministry, in which they said that reducing the price by $ 4 per MMBtu by adding a little margin to the cost of gas extracted from domestic resources. Would be harmful These companies have even said that the production of gas at the new price will not be possible under any circumstances.
On the other hand, the government has also started to believe that if it is to attract domestic and foreign investors to the gas sector in the country, then they will have to give a minimum benefit. If sources of the Petroleum Ministry and government oil companies are to be believed, 50 percent of the total consumption in the country is imported gas. It is also certain that all companies will have to benefit from reducing dependence on imported gas.
It should be known that PM Narendra Modi is constantly insisting that by 2030 the country’s energy consumption should be 15 percent gas-based. For this, the government is trying to lay gas pipelines across the country on a war footing. Apart from this, the emphasis is also being given on promoting gas-based transport to keep the environment pure. But this figure is a shock for the country in which domestic gas production has decreased by 13 per cent instead of increasing from April to August 2020. Due to which the profit of ONGC, the state-owned oil and gas producer, decreased by 92 percent between April and June. Experts are accepting the declining prices of domestic gas for this. Given these reasons, it is feared that the government may increase the prices of domestic gas.