NTPC pitches for long term LNG contact-III: Low price gas for CGD leading to market distortions
The government's decision to allocate 110% of the gas quantity needed for CNG and PNG through artificially low priced domestic gas is causing a demand distortion of unprecedented proportion. 8As domestic gas price has remained stagnant, the price of competing liquid fuels such diesel and petrol have flared up as subsidies have been removed on the latter. 8The price differential as of now is as high as 68%, causing the market to become distorted 8The differentials between competing fuels have thus become artificially wide 8As increasingly less polluting BS-VI soot less fuel is supplied to the market, the government will need to rethink the policy of 110% allocation of cheap domestic gas to the CNG, if not the PNG segment. 8As renewable energy infusion goes up, the power sector may need to be bailed out too with some low priced gas Click on Reports for more on these differentials.