India's Natural Gas Market: Structural Reforms on the Horizon

A PNGRB report advocates major reforms for India's natural gas sector to enhance transparency, attract investment, and improve market efficiency. The suggested changes aim to create open access and flexibility, with hopes of increasing the role of natural gas in India's energy transition.

In a bid to overhaul India's natural gas sector, a high-level expert committee established by the Petroleum and Natural Gas Regulatory Board (PNGRB) has recommended substantial structural reforms. The proposals aim to establish a free and competitive market for natural gas, emphasizing the importance of market-driven pricing and open access in accelerating India's clean energy transition.

The Vision 2040 - Natural Gas Infrastructure in India report, led by former PNGRB chairperson D K Sarraf, outlines the benefits of a liberalized gas market. Such a market is expected to boost transparency, encourage investment, improve resource allocation, and increase liquidity. The committee points out that current market distortions hamper growth and hinder the entry of new players across various verticals, including exploration, pipelines, LNG terminals, and city gas distribution.

Despite being among the world's rapidly growing gas markets, India lacks a liquid trading hub for effective price discovery. The suggested reforms, including creating a neutral ISO and unified online platforms, aim to elevate India's market to align with global gas hubs. The panel also proposes infrastructural changes, such as improved access to pipelines and LNG terminals, which are crucial for integrating natural gas more deeply into India's energy mix by 2030.