Plea for pooled gas gains steam

Mumbai gas distributors are lobbying the government to restart the pooled gas scheme to alleviate supply and pricing pressures caused by ongoing tensions in West Asia. The pooled mechanism, launched in March following a rise in regional conflict, was abandoned in July when the government deemed the Strait of Hormuz to have calmed. This move has left CGD firms with supply uncertainty and a shortfall in gas.

Executives claim the withdrawal has strained their sourcing, with domestic APM and NWG currently making up 40%-50% of gas supplies. After the pool's elimination, CGD companies are turning to mid-term purchases and long-term contracts once market conditions stabilize. India, a top LNG importer, relies on Qatar for over 40% of its gas needs. However, Iran's missile attacks halted Ras Laffan LNG production, and Hormuz disruptions prompted Qatar Energy to halt exports, forcing Indian firms to hunt for alternatives.

The government introduced the pooled scheme with 7-8 million metric standard cubic meters of gas per day priced at $11.60 per mmBtu. The Ministry of Petroleum and Natural Gas has not responded to inquiries. MGL stated the recent Gulf tensions have cut imported gas, leading CGD firms to raise prices by ₹5 per kg since February. They suggest a return to pooled gas could help mitigate consumer and industry volatility while ensuring adequate supplies.