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Gas market in India remains under-analysed
Oct 16: The gas market is India continues to remain badly under-analyzed.
8The price differentials between all types of substitutable fuels and LNG as well as domestic gas remain not well understood.
8Fuel switching between LNG, ethane and LNG, or between dirty fuels such as petroleum coke and LNG is a phenomenon that gas suppliers do not adequate attention to.
8The dynamics are not well understood yet as the information flow on how these differentials work at the retail level is non-transparent.
8This in turn forces gas suppliers to look at governmental intervention, from tax cuts to subsidies, as the sole way to spur demand.
8In India too, like the way it is globally,  price differentials are the major determinants of demand at the supply level. While Henry Hub prices are not directly linked to crude price, with the oil/gas price ratio ($ per bbl WTI/$ per mcf Henry Hub) of around 17x at the end of September which is well outside the long-term ratio of 6-9x, they are circumscribed by the prices of heating oil and coal prices.
8But no one really understands these differentials well enough in India
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