"There is a mismatch between demand and supply of natural gas and LNG. While efforts to produce more gas in the country and importing it through trans-national pipelines are underway, consumer industries like power and fertiliser must get prepared for paying economic prices of gas," Petroleum Secretary S C Tripathi said at the India Energy Mart in New Delhi.
Natural gas price of Rs 2850 per thousand cubic metres is currently half of the market price and the petroleum ministry has proposed to raise this cap for power and fertiliser units to Rs 3600 and Rs 3200 respectively.
However, both power and fertiliser ministries have opposed the move to raise prices.
Tripathi said gas-oil consumption ratio in the country at present was 20:80 but in the next 20 years the share of gas will go up to 40 per cent as most expansion projects were on gas.
The current requirements of gas are to the tune of 150 million cubic metres per day but supply is 90 million cubic metres per day, he said.
Under the administered price mechanism, ONGC charges $1.25 1.5 per mbtu of gas. But, other joint venture players were charging $3.11 per mbtu and further want it raised to $5.
Similarly, Petronet supplies LNG at $3.5-4 per mbtu. This needs to be coordinated, he said. This requires a regulatory framework which was in offing, he said, adding until a regulator was appointed, government would have to determine the prices, where the pipelines should be built and where LNG terminals would be set up.
Tripathi said there was also a need to prepare a pipeline policy and an infrastructure network for connecting importance centres of production and consumption.
Besides, Petronet's Dahej LNG terminal and Shell's Hazira terminal, work was also underway for more LNG terminals at Ennore, Kochi, Mangalore, and Dabhol, Tripathy said, and suggested power companies to set up gas-based plants.
"LNG supply companies world over seek remunerative prices and the generation companies would have to pay economic prices for the gas," he said.