FICCI has strongly advocated that gas pricing mechanism is adequately remunerating domestic E&P activity, which helps India to ramp up the domestic gas supply volumes.
Not only is this imperative for the development of domestic hydrocarbon industry but it will also help in ensuring India's energy security, FICCI said in a recent statement. A pricing regime should be reflective of the enormous geological risks and production uncertainties, which are inherent in geography such as India.
Commenting on a letter to Kapil Dev Tripathi, Secretary, Ministry of Petroleum and Natural Gas, FICCI insisted that the current gas pricing formula be relooked, as it is unfairly biased towards the pricing in gas surplus economies such as the United States, Canada and Russia and is not consistent with realities of Indian Market.
Dr. Didar Singh, Secretary General, FICCI, emphasized that India's vast untapped reserves in deepwater, ultra-deepwater as well as North East and frontier basins can only be brought online by creating a favorable pricing regime, which incentivizes both domestic and foreign Oil and Gas majors to commit significant amounts of risk capital and advanced engineering solutions in these areas.
Continuing with the current gas pricing regime, India will have larger goal of reducing oil import dependency and building the domestic hydrocarbon capacity as envisaged in Prime Minister Narendra Modi's "Make in India" initiative.