Experts suggest government to introduce import parity pricing for natural gas as it is a cleaner fuel and leaves a far smaller environmental footprint.
Presently, crude oil produced in the country is given import parity price. This is however denied for gas. If the same well produces oil and gas, then the former receives import parity price, while the latter does not. Such a system naturally discourages investment and development of the gas industry.
Experts argue that private players don’t have incentive to invest in domestic natural gas assets because of the absence of market-based pricing, which is the sole incentive for private investors. Therefore, these investors are buying and developing gas assets overseas, instead of investing their money in domestic fields.
As a result, employment is being generated in the host countries and their economies are being developed rather than India’s, experts argue.
The principal obstacle to introducing armÂ’s-length market price for gas in India is the policy of allocation of gas to some so-called priority customers.
Energy is the single largest import item. Given the present scenario of global economic uncertainty, inflow of overseas funds and exports have come down. Rising energy imports (last yearÂ’s imports totalled up to $180 billion against the overall trade deficit of $185 billion) are a major factor for IndiaÂ’s mounting trade deficit. Achieving energy security and self-sufficiency are priority goals for the country, experts opine.
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