edit Ashok Sreenivas | Girish Sant | Daljit Singh

Demand-Supply situation in natural gas in India is likely to undergo a radical change in coming years. The gas production is likely to increase by about 200% due to large gas finds under NELP regime. The pricing of new gas finds has been a controversial process. The controversy has centered around issues such as the gas price, the formula based on which the price was discovered, and the process by which the formula was arrived at. But a surprising lack of transparency, non-articulation of Gas Utilization Policy, and issues related to industry structure remain neglected. This article published in EPW (25th Aug 2007), examines issues in the sector such as the supply-demand situation, the emerging market structure, policy and governance issues, the structure of NELP, method of arriving at the 'Arms length pricing' for NELP gas, and gives suggestions for mid-course correction.

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