INTERVIEW: Deregulating India’s gas market, reforms vital for system efficiency, stability, says IGX CEO

The Indian Gas Exchange is hoping for speedy implementation of measures to deregulate the country's gas market further and extend gas pricing freedom, a move that will also augment liquidity in the exchange as it pushes forth its growth strategy, Rajesh Kumar Mediratta, MD & CEO, IGX told Platts in an interview.

India is targeting to raise the share of natural gas in its primary energy mix from 6%-7% currently to 15% by 2030 to meet its growing energy needs and advance its net zero pledge. However, more favorable market conditions, further expansion of gas pipeline infrastructure and a ramp up in domestic production are vital to ensuring increased consumption of the fuel.

"We want more thrust on gas reforms and policies," Mediratta said, adding that the Kirit Parikh committee recommendations made in 2022 are a step in the right direction.

The Committee had recommended the complete liberalization of natural gas prices by Jan. 1, 2027.

"The government should allow at least a percentage of all the diverse gas supply to come onto the exchange," Mediratta said. Currently, only regasified LNG and limited domestic gas come under free market gas.

"We should also have some part of ceiling price gas and APM [Administered Price Mechanism] gas, and a portion of long-term contracts to be traded on the exchange to have a good gas mix," Mediratta said.

A diverse supply will ensure less volatility in the system and more stability in domestic gas markets. The move will also enhance liquidity, and transparency, ensure more market depth in terms of availability of gas, and instill greater confidence in the exchange, Mediratta said.

Platts, part of S&P Global Commodity Insights, assessed the LNG West India Marker for April at $13.45/MMBtu on March 3, at a discount of 35 cents/MMBtu to the Platts April JKM assessment.

"We would also like the government to make changes to the taxation system... entry and exit system of capacity booking, scheduling and tariffs are necessary to bring ease in trading and balancing," Mediratta said.

IGX operates across 15 delivery points comprising four LNG terminals, eight domestic gas field landfall points, and three pipeline interconnections.

The majority of IGX's trade is at the Dahej delivery point but close to 50% still occurs across all other points, according to Mediratta.

"So, we would like to have a virtual hub, where we don't need to worry about delivery points and for this, we need an entry-exit tariff model and common taxation," he added.

Under the entry-exit tariff model, the contractual path of the transportation services will get broken into two transactions -- entry and exit -- and both will be entered separately, Mediratta explained.

He said that separate booking of entry and exit capacity will allow users to book capacity without any complication of the contractual path.

It will also enable users to buy and sell gas freely after paying the tariff to enter the system, creating a more efficient gas market, increasing utilization of the network, and ultimately paving the way for the development of "One Nation-One Grid-One Market," he continued.

A common capacity booking platform is also a necessity and should be created, Mediratta said.

There are many pipeline operators in the country, with each having their pipeline network and system. That should be replaced with a common portal that operates on rule-based capacity booking so that all shippers get a level-playing field, Mediratta said.

Market enablers such as uniform taxation, by bringing gas under the ambit of the Goods and Services Tax, will also improve market efficiency, Mediratta said.

IGX growth initiatives

In January, IGX announced the launch of Long-Duration Contracts of three to six months, following approval from the Petroleum and Natural Gas Regulatory Board. These contracts leverage IGX's Gas Price Index and international benchmarks Platts JKM, Platts WIM, and Platts Dated Brent.

"We will be working on this -- three-month, six-month contracts -- further to enhance liquidity," Mediratta said, adding that "IGX is also looking to launch green certificates for trading."

This comes after the government in 2023 announced a roadmap for mandatory blending of compressed biogas in the transportation and domestic segments of the city gas distribution sector.

IGX also signed a Memorandum of Understanding with Austria's Central European Gas Hub, or CEGH, in January to explore opportunities in natural gas and renewable gas trading.

"This will help us draw learnings from Europe on how they develop their gas market," Mediratta said.

At the India Energy Week 2025 held in New Delhi in February, IGX and HPCL signed an agreement to work toward creating a liquid and tradable natural gas market at the Chhara delivery point on IGX's gas trading platform.

Also, IGX and Crown LNG recently signed an MOU to cooperate on LNG sales to pipeline customers downstream from Crown's planned LNG import terminal in Kakinada, India.