India should benchmark its natural gas prices to similar gas-deficient nations instead of using rates prevalent in gas-surplus geographies like the US and Canada, says Standard & Poor's Ratings Services.
The Cabinet Committee on Economic Affairs on Wednesday approved a major policy intervention, through an innovative mechanism, to revive and improve utilization of the stranded gas based power generation capacity in the country.
The Union Cabinet had in June decided to price all domestically produced natural gas at an average of the price prevailing at international gas trading hubs and the actual cost of importing liquid gas (LNG).
A week after doubling of natural gas prices was approved, the Oil Ministry today rebutted charges of the move resulting in windfall gains to Reliance Industries, saying new gas production from the company's fields will not start before 2017-18.
Amidst a row over his ministry's proposal to raise natural gas prices, Oil Minister M Veerappa Moily on Wednesday said the revision in rates was a contractual requirement which will help remove policy uncertainty and spur investments that have almost dried up.