Govt undertaking energy transition to achieve Net Carbon Zero by 2070: Puri

Hardeep Singh Puri said the government is "acutely aware" of the need for a just and stable energy transition

Minister of Petroleum and Natural Gas Hardeep Singh Puri on Thursday said that the country is undertaking a journey to achieve “Net Zero Carbon” by 2070 and for the transition to be stable, energy should remain accessible and affordable.

Puri said reforms in the hydrocarbon industry would help secure the energy future of Indian citizens.

He said that gas pricing reforms would incentivise investment in India’s exploration and production (E&P) sector by ensuring that gas production from new wells of nomination fields will receive 20 per cent higher prices.

“These reforms will not impact private operators of New Exploration Licensing Policy (NELP) fields or new gas production from field development plans submitted after February 2019”, the petroleum minister added.

The minister said in the absence of gas pricing reforms, the price of gas would have become uncompetitive to alternative fuels. “The prices of gas for priority consumers would have increased by about 10 per cent in the next half-year and continued to rise in the subsequent periods”, Puri said.  

“The Administered Pricing Mechanism (APM) will be determined monthly at 10 per cent of the average Indian Crude Basket Prices, with a ceiling ($6.5/MMBTU) and floor ($4/MMBTU). The ceiling will remain the same for the first two years and then increase by $0.25/MMBTU every year, to adjust for any cost inflation”, said the petroleum minister.

Puri said planned pricing of petrol and CNG by the government has benefited the public. “We have already seen that the average cost of PNG has been reduced by about 10 per cent, and CNG has seen a 6-7 per cent reduction in prices, Puri said.

Since India imports 85 per cent of its oil demand and close to 50 per cent of demand for natural gas, the government is “acutely aware” of the need for a just and stable energy transition, he stated.

To expand the use of clean energy, Puri said that government plans on diversification of supplies; increasing alternate energy sources like biofuels, ethanol, compressed biogas (CBG) and Surya Nutan; increasing E&P footprint; and achieving energy targets through electric vehicles (EVs) and hydrogen.