A high-level expert committee set up by the Petroleum and Natural Gas Regulatory Board (PNGRB) has called for sweeping structural reforms to create a free, competitive natural gas market in India. The committee has stressed that market-driven pricing and open access are essential for the country’s clean energy transition.

In its report – Vision 2040: Natural Gas Infrastructure In India – the panel, led by former PNGRB Chairperson D K Sarraf, has said that a liberalised gas market will enhance transparency, spur investment, improve allocation of resource and deepen liquidity.

A competitive system, it has added, will remove current market distortions and attract new players across exploration, pipelines, LNG terminals and city gas distribution.

The government aims to raise the share of natural gas in the country’s energy basket to 15 per cent by 2030, up from the current 6.2 per cent.

India’s present pricing framework – an assortment of government-regulated gas, market-linked domestic production and LNG imports –creates inefficiencies, the committee has noted.

It has flagged resale restrictions in re-gasified LNG (RLNG) contracts, lack of an independent system operator, limited open access to infrastructure and the absence of contract-path transmission tariffs and location-based taxation as major hurdles.

Natural gas, extracted from underground and offshore reservoirs, is used to generate power and produce fertiliser. It is also turned into CNG to power vehicles and piped to household kitchens for cooking and serves as feedstock across several industries.