Now Reading: West Asia crisis stalls Assam’s PNG, CNG network expansion
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West Asia crisis stalls Assam’s PNG, CNG network expansion
The West Asia crisis has pushed imported natural gas prices to around $30 per MMBtu, nearly halting the expansion of PNG and CNG networks in Assam’s commercial and industrial sectors. Domestic gas…
The West Asia crisis has pushed imported natural gas prices to around $30 per MMBtu, nearly halting the expansion of PNG and CNG networks in Assam’s commercial and industrial sectors. Domestic gas remains at about $7 per MMBtu under the administered price mechanism (APM), but the widening price gap makes new connections unviable for businesses. Guwahati saw PNG connections double to 2,200 since May, but growth has since slowed amid rising costs and marketing challenges.
The Assam government and gas distribution firms continue to push for network expansion, but higher imported gas prices are deterring new commercial and industrial users. State-run producers ONGC and OIL supply domestic gas at the lower APM rate. No immediate policy change has been announced to address the cost disparity.
Indian Opinion Analysis
The price disparity between imported and domestic gas has exposed the fragility of Assam's PNG expansion plans. Commercial and industrial users, who depend on imported gas, now face unviable costs, while domestic APM gas remains cheaper but insufficient to meet growing demand. This leaves Assam's gas distributors in a bind: they must either absorb losses or slow down on new connections. The gap underscores that Assam’s gas network growth is tied to global prices, not local production. The next move lies with the Centre and state-run producers, who may need to revise allocation policies to shield industrial consumers from external price shocks. Without that, further expansion in commercial and industrial PNG and CNG appears stalled until West Asia tensions ease.
Source: assamtribune.com
This brief was synthesised by AI from the source linked above. Methodology and corrections.
