Millennium Post

Moily says double-digit gas price will halve demand

Amidst a row over doubling of natural gas prices, Oil Minister M Veerappa Moily on Tuesday said a double digit rate will halve the demand for environment- friendly fuel in the country.

The share of natural gas in the total energy consumption in the country is projected to nearly double from existing 11 per cent to 20 per cent by 2025, he said in his keynote speech at the 2nd LNG Producer-Consumer Conference in Tokyo.

Quoting a recent study on the gas sector, he said total gas demand would be around 260-350 million standard cubic metres per day if the city gate or delivered gas prices are $5.8-6.5 per million British thermal unit.

Currently most of the gas produced in India is sold at $4.2 per mmBtu at well-head and delivered price is up to $6.5, at rate which generates an additional demand of 204 mmscmd over and above present consumption of 145.7 mmscmd.

‘In case the prices rise to $10-12 per mmBtu, potential domestic gas demand would be lower at around 180 mmscmd, generating additional demand of only 72 mmscmd, whereas at prices above $12 and up to $18 per mmBtu, the potential demand would be limited to 38 mmscmd only,’ he said.
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