Prime Minister Manmohan Singh, whose UPA government has come under criticism for exercising controls on energy pricing, on Tuesday said that market-based pricing and technology were essential to meet India’s growing energy needs, underlying a reformist intent.
Assuring investors of the government’s commitment to provide an enabling environment for exploration of new sources of energy in the country, Singh told the 8th Asia Gas Partnership Summit that the US shale gas revolution where technology and market-based pricing had helped exploit the unconventional gas resource and generate an energy surplus was a model to be emulated.
“This (technology and market-based pricing) is a combination that is essential to provide rapidly-growing economies like ours with energy solutions commensurate with our needs,” Singh said.
The government has envisaged a new pricing regime from April 1, 2014, which will nearly double natural gas rates to $8.2 per million British thermal unit (mBtu). Though the new rates will still be lower than the market price, the move is seen as a major reform initiative by the UPA government torn between consuming industries and energy producers and grappling with the inflationary potential of energy price hikes.
India, currently the seventh-largest energy producer in the world, needs to raise its energy supply by three-four times within the next two decades, the Prime Minister said. “India is expected to be the third-largest energy consumer by 2020.”