Lok Sabha Question No. 495 (STARRED), answered on 2018-04-02
Subject: New Domestic Natural Gas Pricing Guidelines
Ministry: PETROLEUM AND NATURAL GAS
Asked by: SANJAY SHAMRAO DHOTRE, BHARTRUHARI MAHTAB

## STARRED QUESTION NO. *495

## TO BE ANSWERED ON 02.04.2018

## NEW DOMESTIC NATURAL GAS PRICING GUIDELINES

## *495.  SHRI SANJAY DHOTRE: SHRI BHARTRUHARI MAHTAB:

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

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- (a) whether there is a gap between demand and supply of natural gas to the priority sector including Fertilizer and Power Sectors of the country;
- (b) if so, the details thereof for the last three years and the current year, State/ UT and sector-wise and the reasons therefor;
- (c)  whether  such  gap  in  demand  and  supply  of  gas  has  adversely  impacted  the production capacity and profitability of the major companies of the said sectors and if so,  the  details  thereof,  company-wise  along  with  the  reaction  of  the  Government thereto;
- (d)  whether  the  cases  of  violation  of  New  Domestic  Natural  Gas  Pricing  Guidelines, 2014 by companies have come to the notice of the Government since inception; and
- (e)  if  so,  the  details  thereof,  company-wise  and  the  reasons  therefor  along  with  the action taken/being taken by the Government against such companies?

## ANSWER

## पेोलयम औराकृ तक गैस मंी ( ी धमन् धान )

MINISTER OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

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(a) to (e) : A statement is laid on the Table of the House.

## STATEMENT REFERRED IN REPLY TO PARTS (a) to (e) OF THE LOK SABHA STARRED QUESTION NO. *495 ASKED BY SHRI SANJAY DHOTRE AND SHRI BHARTRUHARI MAHTAB TO BE ANSWERED ON APRIL 2, 2018 REGARDING NEW DOMESTIC NATURAL GAS PRICING GUIDELINES

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(a)  to  (c)  :  The  gas  demand  is being  met  through the supply of domestic gas and imported Liquefied Natural Gas (LNG). LNG is imported under open general license on the terms and conditions mutually agreed upon between the buyers and sellers. Details  of  consumption  of  natural  gas  during  last  3  years  and  current  year  in  the country  is  at  Annexure-I.  Profitability  of  the  industries  is  dependent  on  various factors including availability of gas which is sourced as per demand.

(d) & (e): Government of India notified 'New  Domestic  Natural Gas  Pricing Guidelines, 2014' on 25.10.2014. This pricing mechanism is formula based and has been worked out considering the volumes and prices prevailing at major international markets such as Henry Hub (USA), National Balancing Point (UK), Alberta (Canada) and  Russia.  The  formula  has  been  finalized  considering  the  requirements  of producing  and  consuming  sectors,  and  has  tried  to  make  a  fine  balance  between their interests. The prices are revised after every six months in accordance with said guidelines.

Further, on representations from various operators, Government notified a policy in March,  2016  to  grant  marketing  and  pricing  freedom  with  a  price  ceiling  on  gas produced from discoveries in Deep-water, Ultra Deep-water, and High pressure-High Temperature areas.  Government has also provided marketing and pricing freedom for the sale of crude oil and natural gas to be produced under the Discovered Small Fields Policy-2015 and Hydrocarbon Exploration and Licencing Policy (HELP). The costs  of  exploration  and  Production  are  generally  higher  in  deep/ultra-deep  water blocks in comparison to shallow water or land blocks. Government has also granted pricing and marketing freedom to the gas produced from Coal Bed Methane (CBM) blocks.

ANNEXURE-I ANNEXURE    REFERRED  IN  REPLY  TO  PART  (a)  to  (c)    OF  LOK  SABHA STARRED QUESTION NO. *495 TO BE ANSWERED ON 2.04.2018 REGARDING NEW DOMESTIC NATURAL GAS PRICING GUIDELINES

NATURAL GAS CONSUMPTION IN THE COUNTRY (Figures in MMSCMD)

| Year                         |   Domestic gas |   LNG |   Total Gas Consumption |
|------------------------------|----------------|-------|-------------------------|
| 2014-15                      |          73.97 | 42.85 |                  116.78 |
| 2015-16                      |          68.38 | 62.18 |                  130.56 |
| 2016-17                      |          69.14 | 69.98 |                  139.12 |
| Current Year (till Dec.2017) |          71.29 | 72.3  |                  143.58 |

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