Context: International Energy Agency (IEA) and Ministry of Petroleum and Natural Gas jointly organized a webinar on “Building a Natural Gas‑Based Economy in India Amidst a Changing Global Gas Market Landscape’’. 

More on news:

  • The workshop is the first collaborative activity between the IEA and the Ministry of Petroleum and Natural Gas in the realm of a gas-based economy.
  • The collaboration of India and IEA in the natural gas sector are intended - 
    • To develop relevant knowledge sharing and experiences on a range of issues including natural gas infrastructure, regulation and gas hub development 
    • To help facilitate India’s national efforts to increase the share of natural gas in the energy mix and strengthen India’s energy security

India’s association with IEA: 

  • India and IEA have been cooperating across a range of areas, including oil security, energy efficiency, statistics and technology since 2017 when India became Associate Country of IEA. 
  • The genesis of this collaboration can be linked to the launch of first In-depth Review of India’s Energy Policies by IEA in January 2020 in which it had lauded Government of India’s efforts to increase the share of Gas in India’s energy mix.

India’s Gas Sector:

  • India has set a very ambitious target of increasing the share of natural gas from 6 % to 15 % by 2030 in India’s energy mix.
  • As per experts India will emerge as pioneer in Gas Based economy as focus is being given - 
    • To enhance domestic gas production
    • On expeditious development of gas infrastructure as well as development of the Gas market by providing open access to gas infrastructure.
  • On creation of a free gas market, the Government is progressively moving towards a marketing and pricing freedom regime in the country.
    • Gas grid is being expanded to new markets in eastern and north-eastern part of the country with Government’s support of capital grants for Pradhan Mantri Urja Ganga (PMUG) and Indradhanush North Eastern Gas Grid projects.
    • Coverage of City Gas projects is being expanded to 232 Geographical Areas (GAs) spread over more than 400 districts, with a potential to cover about 53% of the country’s geography and 70% of the country's population.
  • Efforts are underway to rationalise gas pipeline tariff structure as - 
    • The present zonal tariff structure leads to additive tariffs for usage of multiple pipelines to transport natural gas from the distant gas supply sources. 
    • It causes wide disparity in pipeline tariffs particularly for the buyers located distant from the gas sources, thereby hindering the development of new gas markets/ demand centres in far flung and remote areas. 

Benefits of Rationalised Tariff:

  • It will facilitate in creating a single gas market by attracting investment to complete the Gas Grid, thereby ensuring equitable access to natural gas across the country. 
  • It will create a level playing field among gas consumers located in far/remote areas
  • It will improve Gas affordability throughout the country.
  • It will encourage gas industries to utilize the opportunity of procuring their gas requirement through the Gas Trade Exchange(s) platform based on market mechanisms. 
  • Level playing field will reduce the cost of industries and make them more competitive at Global level. 


International Energy Agency:

  • It is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis. 
  • The IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
  • Now the agency’s mandate has broadened to focus on the "3Es" of effectual energy policy: energy security, economic development, and environmental protection.
  • The IEA acts as a policy adviser to its member states, but also works with non-member countries, especially China, India, and Russia. 
  • The IEA has also been criticized for failing to create a 1.5°C scenario and place it centrally in its annual World Energy Outlook report.