High prices threaten the country's goal to boost the use of gas in its energy mix as some industries are looking at switching back to coal and petcoke, a top bureaucrat in the union oil ministry said on Wednesday.
Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country's energy mix to 15% by 2030 from about 6.2% now to cut India's carbon footprint.
In the long run, the country wants to raise the use of renewables and biofuels and had turned to the use of natural gas in the "intermediate period" despite holding vast reserves of coal, oil secretary Tarun Kapoor said at the India Energy Forum.
"Now this very high gas price has given us a message that probably we can not rely on natural gas. The rather basic question now is can we rely on imports," Mr Kapoor said
Liquefied natural gas (LNG) under long-term deals costs about $11-$12 per million British thermal units (mmBtu), versus more than $38 per mmBtu on Asia's spot gas LNG-AS market currently and a record high of over $56 hit earlier this month.
To cut its carbon footprint, the country allowed some consumers to shift to gas. Mr Kapoor said these industries might switch back to coal and petcoke due to the higher gas prices. Petcoke, short for petroleum coke, is a byproduct of the oil-refining process.
India, the world's third biggest oil consumers and importer, is also exploring strategies to cut its crude import bill including asking companies to jointly negotiate for oil purchase contracts.
Mr Kapoor said domestic refiners should look at having long-term oil contracts of more than one year's duration with a fixed, or near to fixed, price component.
"In oil, term contract is just a one-year contract and it is not a fixed-price contract," Mr Kapoor said.
"The contract can be fixed-price or linked to some index which is not so volatile. It is just a question of reducing risk," he said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Indian Researchers Find Method To Decode Monkeypox Virus, Aid Diagnostics Bhutanese Prime Minister Tshering Tobgay To Visit India From November 24-26 Behind Virat Kohli's Perth Test Tactic, England Great's Justification: "Had To Do..." "Thousand Times Better...": Delhi Lt Governor's Surprise For AAP's Atishi "World War 3 Has Begun": Ukraine Ex-Military Commander Amid Russia Conflict "Violation Of Sovereignty, Abuse Of Power": Kanwal Sibal On US Report On Adani Group Bastar Will Be Maoist-Free Very Soon, Says Chhattisgarh Minister Arun Sao Petrol Pump Owner, Son Shot At Over Bill In UP's Kaushambi: Police Indian Researchers Find Method To Decode Monkeypox Virus, Aid Diagnostics Track Latest News Live on NDTV.com and get news updates from India and around the world.