(EnergyAsia, May 25 2010, Tuesday)—The Indian government is planning to raise the price for locally produced natural gas to help pay for costly imported liquefied natural gas (LNG). Gas produced by state-owned ONGC now sells for US$1.82 per million British thermal units (mmBtu) while imported LNG costs US$5.7 per mmBtu.

The government has tasked state-owned GAIL to conduct research on how to make LNG more affordable.

Spain’s Mercados Energy Markets, hired by GAIL, has recommended a “common pool price mechanism,” averaging the price of gas from five different sources for only power and fertiliser units.

The consultant has suggested a pooled price of US$3.48 per mmBtu for the power sector and US$3.81 per mmBtu for fertiliser users. The government is reviewing the recommendations.