Government undertakes energy transition to achieve net zero carbon by 2070: Puri

Oil and Natural Gas Minister Hardeep Singh Puri said on Thursday that the country is embarking on a journey to achieve “net zero carbon” by 2070 and for the transition to be stable, energy must remain accessible and affordable.

Puri said that reforms in the hydrocarbon industry would help secure the energy future of Indian citizens.

He said the gas price reforms would incentivize investment in India’s exploration and production (E&P) sector by ensuring that gas production from new wells in the nomination fields receive 20 percent higher prices.

“These reforms will not affect the private operators of the fields of the New Exploration License Policy (NELP) or the new gas production of the field development plans presented after February 2019”, added the Minister of Petroleum.

The minister said that in the absence of gas price reforms, the price of gas would have become uncompetitive for alternative fuels. “Gasoline prices for priority consumers would have increased by around 10 percent in the next half and continued to rise in subsequent periods,” Puri said.

“The Managed Price Mechanism (APM) will be determined monthly at 10 percent of the Indian crude basket average prices, with a ceiling ($6.5/MMBTU) and a floor ($4/MMBTU). The ceiling will remain the same for the first two years and then increase by $0.25/MMBTU each year, to adjust for any cost inflation,” the oil minister said.

Puri said that the government’s planned price of gasoline and CNG has benefited the public. “We have already seen the average cost of PNG come down by 10 percent, and CNG have seen a 6 to 7 percent reduction in prices,” Puri said.

With India importing 85 percent of its oil demand and about 50 percent of natural gas demand, the government is “very conscious” of the need for a just and stable energy transition, he said.