PM Modi calls Cabinet nod to natural gas marketing reforms 'futuristic'

Asserting that India is moving ahead on the path of futuristic reforms, PM Modi hailed the 'natural gas marketing reforms' and said it will add strength to efforts of making India a gas-based economy

Prime Minister Narendra Modi

Asserting that India is moving ahead on the path of futuristic reforms, Prime Minister Narendra Modi on Wednesday hailed the Cabinet's approval to 'natural gas marketing reforms' and said it will add strength to the efforts of making India a gas-based economy.

The Cabinet Committee on Economic Affairs (CCEA) chaired by the prime minister has approved Natural Gas Marketing Reforms'.

The objective of the policy is to prescribe standard procedure to discover market price of gas to be sold in the market by gas producers, through a transparent and competitive process, permit affiliates to participate in bidding process for sale of gas and allow marketing freedom to certain Field Development Plans (FDPs) where production sharing contracts already provide pricing freedom, an official statement said.

Hailing the reform measure, Prime Minister Modi tweeted, "India is moving ahead on the path of futuristic reforms. Today's Cabinet decision on Natural Gas Marketing Reforms' add strength to the efforts of making India a gas based economy."

The government between 2016 and 2019 gave pricing freedom for all fields except those given to state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) on a nomination basis.

But, there were restrictions on marketing including a ban on affiliates of producers buying the fuel and in some cases, a state nominee being mandated to offtake the gas. This restricted competition kept prices artificially low.

The CCEA approved natural gas marketing reforms, Oil Minister Dharmendra Pradhan told reporters here.