The International Energy Agency (IEA) has slammed India’s natural gas pricing policy, saying linking domestic production to very low global reference prices has reduced incentives for producers to raise supplies.
In its first in-depth review of India’s energy policies, IEA said for the share of environment-friendly fuel to rise, the government needs to ensure gas is treated on a level playing field with other fuels for taxation and is included under the Goods and Services Tax (GST).
However, one challenge to raising share of natural gas in the energy basket to 15 per cent by 2030 from current 6 per cent is gas pricing, it said. “Linking domestic gas prices to a basket of (very low) international reference prices has reduced incentives for domestic producers to increase supply.”
