With current pricing formula making natural gas production economically unviable, Oil Minister Dharmendra Pradhan recently hinted at bringing in a new gas policy as well as launching a gas exchange very soon as part of reforms to promote greater use of environment-friendly fuel in the world's third-largest energy-consuming nation.
Pradhan also said that India favors reasonable prices that give some space to the producer countries.
"We have to have a reasonable price. India is a major consumer. But at this juncture, India's viewpoint is the price should be reasonable and responsible. Very low prices are not the answer. Reasonable prices are the answer," he said.
Speaking in the latest edition of the CERAWeek Conversations series, he said, "Oil prices should give some space to the producer countries. It should be profitable for them; it should be viable for them."
The transcript of his address was provided by the organizer, IHS Markit.
His views come days after international oil prices plunged to USD 18.10 a barrel, its lowest since November 2001. Rates have since rebounded to around USD 30 per barrel.
On longer-term energy policy priorities following national lockdowns, he said, "We are moving towards a new gas policy, a new tariff policy. We are planning for a gas exchange very soon and we will be liberalizing our distribution mechanisms."
Natural gas prices in India have fallen to their lowest in more than a decade, leading to producers like ONGC incurring losses in businesses.