Petroleum ministry to seek Cabinet approval for domestic gas trading hub

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Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From the UPSC perspective following things are important:

Prelims level: Government mandated formula for determining natural gas prices in the country.

Mains level: Energy related topics are specially mentioned in the mains syllabus.


News

Seeking approval

  1. Petroleum ministry is seeking approval from the Union Cabinet’s for a domestic gas trading hub
  2. It help India adopt a better mechanism for price discovery of both domestic as well as imported gas

Other plans of the ministry

  1. Ministry is in the process of creating an internal think-tank to assist in priority areas like
    (1) foreign investment
    (2) moving towards gas-based economy
    (3) financing models
    (4) using technology and curbing hydrocarbon imports

How is natural gas prices determined, currently?

  1. Currently, the price of natural gas in the country is determined through a government-mandated formula that links the local price to rates prevailing in gas-surplus nations

Future plans of the government

  1. Currently, India imports almost 60 per cent of its petroleum requirements
  2. India also plans to double its network of pipelines to transport natural gas to 30,000 km within the next three-four years which will help in shifting to a gas-based economy, reduce greenhouse emissions and cut oil import
Oil and Gas Sector – HELP, Open Acreage Policy, etc.
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