BackIndia launches maiden gas exchange
Indian Energy Exchange, the country's largest electricity trading platform, is the parent of the gas exchangeDharmendra Pradhan, minister of petroleum and natural gas, launched the exchange online
PremiumMUMBAI: India on Monday launched its maiden gas exchange, two years after mooting the idea.
Indian Energy Exchange, the country's largest electricity trading platform, is the parent of the gas exchange, and had been planning to set up the nation’s first natural gas exchange to tap into the increasing demand for clean fuel.
In February, the Indian Gas Exchange (IGX) had invited members to be part of its platform ahead of its formal launch. IGX has 12 members and 300 plus clients so far which includes buyers, sellers and users.
Dharmendra Pradhan, minister of petroleum and natural gas, launched the exchange online.
According to the International Energy Agency global gas demand is expected to fall by 4%, or 150 billion cubic metres (bcm), to 3,850 bcm this year – twice the size of the drop following the 2008 global financial crisis.
India, along with China, is expected to be a significant driver of demand for natural gas post 2021. Being the biggest emitter of greenhouse gases after the US and China, India aims to achieve emission reduction targets pledged at the 21st session of the Conference of the Parties (CoP) in Paris by promoting the use of natural gas and green fuel.
Worsening air quality and the India’s dependence on imported crude oil has altered its energy planning. India seeks to increase the share of natural gas in its energy mix to 15% by 2030 from the current 6%.
This budget, finance minister Nirmala Sitharaman announced plans for expansion of the National Gas Grid to 27,000 km from the present 16,200 km to help deepen gas markets in India.
Also, with gas pipelines reaching more areas, it will bring under its ambit more and more domestic and industrial consumers.
Industry players have said bringing natural gas under the ambit of goods and services tax (GST) to transport the fuel across the country will be more effective and will facilitate setting up of a domestic gas trading hub.
While a trading hub would facilitate the availability of gas, the grid would help connect gas sources to consumption hubs which is key to government's plans to increase the share of natural gas in India's energy basket to 15% over the next decade from 6.2% now.
According to analysts, a gas trading hub will help people buy and sell gas directly. Today, gas is locked up in contracts and a trading hub will be a kind of a spot market, which will be good.
The exchange will help bring down the price of natural gas through competitive trade, boosting usage in the country that relies heavily on cheaper coal for its energy needs.
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