High-level committee to draft gas allocation plan for power sector

A cabinet secretary-led high-level empowered committee is discussing a plan to work out a gas allocation mechanism for the power sector. The proposal entails pooling of 5.45 mmscmd of deep-sea gas supplied by the Oil and Natural Gas Corporation (ONGC) with imported liquefied natural gas and supplying it to power plants. Reportedly, there are two options of allocation under review – auction of the gas or allocation by rotation to the power projects. In addition, the central government may provide subsidies to reduce the cost of power generation. The move is expected to revive 25 GW of gas-based capacity that is currently stressed due to natural gas shortage. In a separate development, the Ministry of Petroleum and Natural Gas has floated a cabinet note proposing a market-based price discovery mechanism and removed power plants from the priority list for allocation of gas under the administered pricing mechanism.

GET FREE ACCESS TO OUR ARTICLES

Enter your email address