India has asked its largest liquefied natural gas (LNG) supplier Qatar to cut prices to match a 40 per cent slump in global rates as well as waive penalty for not buying all of the contracted fuel.
India has a long-term contract to buy 7.5 million tonnes of LNG a year at an indexation to a moving average of crude oil price. The price of LNG from Qatar comes close to $13 per million British
thermal unit as compared to the $6-7 rate at which it is available in the spot or current market.
The difference has led to users preferring to buy spot LNG rather than long-term gas from RasGas of Qatar, leading to Petronet LNG Ltd buying 32 per cent less than contracted quantity in the first nine months of 2015.