Lok Sabha Question No. 581 (UNSTARRED), answered on 2017-02-06
Subject: Demand and Supply of Natural Gas
Ministry: PETROLEUM AND NATURAL GAS
Asked by: KRUPAL BALAJI TUMANE

## GOVERNMENT OF INDIA

## MINISTRY OF PETROLEUM AND NATURAL GAS

## LOK SABHA UNSTARRED QUESTION NO. 581 TO BE ANSWERED ON 6 th  February, 2017

Demand and Supply of Natural Gas

†581. SHRI KRUPAL BALAJI TUMANE:

पैट्रोलियम व प्राक ृ लिक गैस मंत्री

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

- (a)  the  details  of  production  and  consumption  of  gas  and  quantum  of  natural  gas  imported during the last three years and the current year;
- (b)  the  basis  on  which  the  price  of the gas manufactured indigenously and imported gas is determined;
- (c) the reasons for not determining uniform prices for gas and for supplying gas to industries in various States at different prices;
- (d) whether the Government receives a part of its revenue from the manufacturing and supply of indigenously manufactured gas; and
- (e) if so, the details thereof?

## ANSWER

पेट्रोलियम और प्राक ृ लिक गैस मंत्रािय में राज्य मंत्री ( स्विन्त्त्र प्रभार ) ( श्री धमेन्त्र प्रधान )

MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM & NATURAL GAS (SHRI DHARAMENDRA PRADHAN)

- (a). The  details  of  production,  consumption  and  import  of  natural  gas  during  the  last  three years and the current year are given below;

(figures in Million Metric Standard Cubic Meters)

| Year                                          |   2013-14 |   2014-15 |   2015-16 |   2016-17 (till Dec '16) |
|-----------------------------------------------|-----------|-----------|-----------|--------------------------|
| Net Gas Production (Excluding Flair and Loss) |   34574.1 |   32693.2 |   31138.5 |                  23087.4 |
| LNG import                                    |   17728   |   18535.7 |   21309.3 |                  18755.3 |
| Total Consumption                             |   52302.1 |   51228.9 |   52447.8 |                  41842.7 |

(b). The price of Natural Gas produced from domestic fields is determined as per the Pricing formula based on New Domestic Natural Gas Pricing Guidelines, 2014. The formula is based on the market prices in major international markets. The Petroleum Planning & Analysis Cell (PPAC)  notifies  these  prices  every  six  months.  The  present  price  valid  for  1.10.2016  to 31.03.2017 is US$ 2.50/MMBTU on Gross Calorific Value (GCV) basis. For Deep Water, Ultra Deep  water  and  High  Pressure-High  Temperature  areas  the  government  has  given  pricing and marketing freedom with a ceiling vide notification dated 21.03.2016. In addition, prices are also  determined  by  the  contractual  provisions  stipulated  specifically  under  the  respective Production Sharing Contracts (PSCs). In case of small/isolated fields of the nominated blocks of National Oil Companies (NOCs), the sale of gas is based on the price at competitive arms length prices, but reserve price for these bids would be equal to the price notified on the basis of New Domestic Gas Price Guidelines 2014 at the time of calling of bids.

The prices of gas imported in the country from the international market are determined on the basis  of  long  term,  short  term  and  spot  LNG  contracts  entered  into,  by  the  respective importers, from the international markets.

(c). The price of gas produced indigenously from various fields and the price of gas imported in the country are based on different pricing models as brought out above. Hence, the prices of gas are not uniform and may vary depending on the source of natural gas. Besides, there are  transportation  tariffs  applicable  on  transportation  of  gas  through  pipelines  and  statutory levies on sale of gas by the Central Government and concerned State Governments before gas  is  made  available  to  consuming  industries  in  various  States.  In  fertilizer  (urea)  sector, government  has  implemented  a  policy  to  supply  Natural  Gas  (domestic  and  Regasified Liquefied  Natural  Gas)  at  uniform  delivered  pooled  price.  This  leads  to  supplying  of  gas  to various  States  at  different  prices.  There  is  40%  subsidy  to  specified  consumers  of  gas produced in the North East region.

(d) & (e). The Government receives royalty on the gas produced indigenously in accordance with  the  provisions  of  the  Oilfields  (Regulation  and  Development)  Act,  1948  (Act  No  53  of 1948). Besides, the Government may also receive revenue as Profit Petroleum and Incidental Income from provisions / stipulations of the Contract under which the gas may be produced.

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