Finshots Daily The economics of rising natural gas prices
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Apr 3, 2025 Natural gas prices are surging in India, prompting a deep dive into the reasons behind this spike. The discussion highlights government pricing changes and how global market dynamics play a crucial role. Additionally, strategies to boost domestic production and diversify energy sources are examined, shedding light on India's response to these rising costs. Tune in to uncover the economic implications this has on the country.
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Natural Gas: Essential Yet Underutilized
- Natural gas is essential for daily life, powering transportation, cooking, and industries.
- Despite its importance, it only accounts for 6% of India's energy consumption, with plans to triple it by 2030.
India's LNG Dependence and Price Vulnerability
- India imports about 50% of its natural gas as LNG, making it vulnerable to global price fluctuations.
- In 2020, ONGC sold natural gas below extraction cost due to regulations tying domestic prices to a global average.
Global Events and Indian Gas Prices
- The government's formula, averaging global prices, dragged Indian prices down during the pandemic.
- As economies reopened and the Russia-Ukraine war began, global gas prices surged, impacting India.