| CHIBA, Japan, April 5
CHIBA, Japan, April 5 India's liquefied natural
gas (LNG) demand could ease as the government has scrapped
subsidies on gas sales to power companies, the chief executive
of the country's biggest gas importer said on Wednesday at a gas
conference in Japan.
Natural gas accounts for about 6.5 percent of India's
overall energy needs, far lower than the global average. India
plans to raise the share of gas in its energy mix to 15 percent
over the next three years, but a major challenge to that goal is
the price sensitivity of Indian consumers.
India has for the last two fiscal years been giving
discounts on the sale of imported LNG to revive more than 14
gigawatts of stranded power generation capacity that had been
hit by domestic gas shortages.
But a power ministry official confirmed that the LNG subsidy
has not been extended beyond March 31, and Prabhat Singh, chief
executive of Petronet LNG, said these gas-based
projects cannot compete with plants using cheaper coal.
"If (the power subsidies in India) don't happen, then
definitely around a million to 2 million tonnes of LNG which was
going there will be lost," Singh told reporters at Gastech in
After the subsidies were first put in place, India's annual
LNG imports surged 15 percent to 16.08 million tonnes in
2015/16. Then for the first 11 months of the 2016/2017 fiscal
year - the April-February period - India imported 17 million
tonnes. Data for March is not yet available.
(Reporting by Mark Tay; Addition reporting by Sudarshan
Varadhan in NEW DELHI; Writing by Nidhi Verma in NEW DELHI;
Editing by Tom Hogue)