Prime Minister Modi said India renegotiated a gas import deal with Qatar to save thousands of crores
India could save as much as Rs 20,000 crore after it renegotiated a long-term gas import deal with Qatar, according to Prime Minister Narendra Modi. At present India buys 7.5 million tons a year of liquefied natural gas from Qatar every year. The price formula was fixed 13 years ago and its terms were out of sync with low global energy prices.
"We are dependent on other nations to meet our requirement of energy and petroleum supplies. And so long-term agreements have been entered into to get assured quantity at a pre-determined price," Mr Modi said in his Independence Day address today. With a slump in global prices, the high rates Qatar charged posed a huge burden on the economy.
"What was Qatar's price, we were bound to pay. But we managed to get Qatar to renegotiate, to make possible something that people said was impossible. (Qatar) was entitled to take Rs 20,000 crore, but we renegotiated the terms because of our diplomatic ties."
RasGas of Qatar supplies liquefied natural gas to India under a 25 year long term contract which was signed in 2004. The previous rate being charged by RasGar was higher than the current market price.
While Prime Minister Modi said that the revision in price would help save Rs 20,000 crore, Oil Minister Dharmendra Pradhan had recently told Parliament in a reply to a written question that the country will save Rs 8,000 crore over the remainder of the contract, which is up to 2028.