The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Narendra Modi has approved ‘Natural Gas Marketing Reforms’, taking another significant step to move towards a gas based economy. 

 

The objective of the policy is to prescribe standard procedure to discover market price of gas to be sold in the market by gas producers, through a transparent and competitive process, permit affiliates to participate in bidding process for sale of gas and allow marketing freedom to certain Field Development Plans (FDPs) where Production Sharing Contracts already provide pricing freedom.

 

The policy aims to provide standard procedure for sale of natural gas in a transparent and competitive manner to discover market price by issuing guidelines for sale by contractor through e-bidding. This will bring uniformity in the bidding process across the various contractual regimes and policies to avoid ambiguity and contribute towards ease of doing business.

 

The policy has also permitted affiliate companies to participate in the bidding process in view of the open, transparent and electronic bidding. This will facilitate and promote more competition in marketing of gas. However, rebidding will have to be done in case only affiliates participate, and there are no other bidders.

 

The policy will also grant marketing freedom to the Field Development Plans (FDPs) of those Blocks in which Production Sharing Contracts already provide pricing freedom.

 

These reforms will also help in creating employment opportunities in the gas consuming sectors including MSMEs and will further help in increasing investment in the downstream industries such as City Gas Distribution and related industries.