Now the price of gas produced at the fields of India, is about 4-5 dollars per MMBtu. Agencies S&P and Moody’s recommended price in the amount of $ 8-10.
NEW DELHI, 9 Oct. Federation of chambers of Commerce of India (FICCI) requested Indian authorities to revise the mechanism for calculating gas prices in the country, according to a press release from the organization, released on Friday.
“FICCI urges (set — ed.) the mechanism for calculating gas prices, which sufficiently compensates for the costs of exploration and production of gas within the country and will increase the volume of gas produced in India. The pricing mechanism should reflect the huge exploration risks and production uncertainties that are inherent in geographical conditions similar to Indian”, — stated in the message.
Earlier, FICCI had sent a letter to the Deputy Minister of oil and gas Kapila virgin Tripathi asking to revise the formula of gas prices because it “does not correspond to the realities of the Indian market and is unfair in comparison with such economies with excessive gas production, such as the USA, Canada and Russia”.
Agencies S&P and Moody’s recommended price in the amount of $ 8-10 per million BTU (British thermal unit), which reflects the realities of gas exploration and production in countries such as Thailand and Indonesia.
“Undeveloped deepwater reserves, deposits in northeastern India and the border of the field can be put into operation only upon a favourable price regime,” said FICCI Secretary General Didar Singh, quoted by the press release. In his view, if the pricing policy for gas will not change, it will exacerbate the country’s dependence on oil imports.
Currently the price of gas produced in domestic fields, is about $ 4-5 per MMBtu. While India buys 7.5 million tonnes of LNG per year under long-term 25-year contract with its largest provider of Qatar at the price of $ 13 per MMBtu.