Natural Gas Marketing Reforms

In News

Objectives of the Reforms

• Prescribe standard procedure to discover market price of gas to be sold in the market by gas producers, through a transparent and competitive process by issuing guidelines for sale by contractor through e-bidding. This will bring uniformity in the bidding process across the various contractual regimes and policies to avoid ambiguity and contribute towards ease of doing business.
• Permit affiliates to participate in the bidding process for sale of gas in view of the open, transparent and electronic bidding. This will facilitate and promote more competition. However, rebidding will have to be done in case only affiliates participate, and there are no other bidders.
• Allow marketing freedom to certain Field Development Plans (FDPs) where production sharing contracts already provide pricing freedom.

Advantages of the Reforms

• The whole ecosystem of policies relating to production, infrastructure and marketing of natural gas has been made more transparent with a focus on ease of doing business.
• These reforms will prove very significant for Atmanirbhar Bharat by encouraging investments in the domestic production of natural gas and reducing import dependence.
• These reforms will prove to be another milestone in moving towards a gas based economy by encouraging investments.
• The increased gas production consumption will help in the improvement of the environment.
• These reforms will also help in creating employment opportunities in the gas consuming sectors including MSMEs.
• The domestic production will further help in increasing investment in the downstream industries such as city gas distribution and related industries.