Jain calls for aligned cost, supply efficiency and taxation for natural gas promotion
India’s target of increasing natural gas share in total energy mix to 15% by 2030 from 6% currently is dependent on affordable pricing and synchronisation of infrastructure in the supply chain, says Petronet LNG MD & CEO Akshay Kumar Singh.
Speaking at the Leadership Panel on “Developing LNG markets and infrastructure” at the India Energy Week, 2024, on 7 Feb in Goa, he identified pricing as the main impediment in persuading users to switch to cleaner fossil fuel.
“Unaffordable prices will force consumers to switch over to other fuels and it is imperative to calibrate it carefully so that high prices do not end up destroying demand,” Singh stressed.
Singh said that wide adoption of LNG was required for energy transition, and the space for the cleaner fuel’s growth already exists in the economy.
LNG can replace a large part of crude, 85% of which is imported. Currently, India imports around 45% of LNG used in the country.
Singh stressed that while pricing is an area of concern for promoting LNG use widely, the fuel has the advantage that it can be sold in any part of the country. Additionally, LNG can also easily replace 10-20% of diesel used in transportation thus increasing the share of cleaner fuel in India’s energy mix.
Moreover, Singh noted that the government’s stated goal is to transition the economy into a gas-based one and that the difficult task of large-scale LNG adoption was possible with the help of government intervention, particularly in adoption of concessional taxation of the fuel.
Speaking at the same panel, Sukhmal Jain, BPCL Director (marketing) and member of board of directors, highlighted that natural gas adoption was necessary for India to join the league of developed countries.
He added that while oil demand growth is projected at 2.5-5% annually, LNG demand growth could be in 4-5% range.
“Cost, efficiency in supply and taxation have to be aligned for natural gas promotion,” Jain said.
LNG is a great partner for renewable energy, which faces intermittency issues due to the cyclical nature of solar, wind and hydro energy, underlined Andrew Barry, Chairman, ExxonMobil LNG Market Development and Vice President, Global LNG Marketing, ExxonMobil Oil & Gas Company.
Speaking at the panel at IEW 2024, Barry identified cost of building LNG production and transmission infrastructure as one of the main challenged in adoption of the clean fuel. Fiinews.com
