LNG prices: Centre counters Delhi govt’s allegations

The Delhi government had alleged last week that the Central government was artificially hiking the “rates” of natural gas to benefit Reliance group. Power minister of the Delhi government Satyendar Jain had also emphasised that the national Capital will pay only on international rates to purchase gas for its power generators.

“We are ready to purchase gas at per the rates in the international market which is $2 per BTU but Union Power Ministry wants us to pay $8 per BTU. Earlier, they were arguing that the rates in international market were high but now they are saying that the cost of transportation is very high,” Jain had said last week while answering a question on partial functioning of Bawana power plant. 

The Centre has countered this allegation and has claimed that there is no LNG available in the international market priced anywhere at US$ 2/mmbtu. In fact, nowhere in the recent price history of LNG has the price level of $2/mmbtu been traded in the international markets. Present spot prices are hovering over $5.25 -6/mmbtu ex-port delivery. 

Due to limited availability of domestically produced natural gas, additional demand of gas in the country is being met through LNG imports.