Indian Energy Exchange or IEX, India’s largest electricity trading platform, will soon launch the country’s first natural gas exchange by March 2020, as it seeks to tap increasing demand for the cleanest fossil fuel.
Well, the operational details such as contract specifications, delivery center, etc are still awaited,
IEX is believed to have started putting together the infrastructure and a team of about 20 officials to run the bourse.
India has been mulling a gas exchange for several years but the move has been reinvigorated by increasing use of the fuel as a global glut damp price.
Worsening air quality and the nation’s dependence on imported crude oil has also spurred a transition in India’s energy planning.
India seeks to increase the share of natural gas in its energy mix to 15% by 2030 from the current 6%, drawing interest from global majors including Total SA and Exxon Mobil Corp.
The proposed natural gas exchange will help bring down the prices natural through competitive trade, boosting usage in a country that relies heavily on cheaper coal for its energy needs.
Still, there are hurdles to overcome. India’s gas market needs uniform trading rules and freedom for consumers to buy the fuel wherever they want.
A plan to allocate a certain volume of domestic gas for trading at exchanges is also waiting for government approval.
Finally, there is the cost of multiple taxations linked to moving natural gas across state borders, with the Petroleum Ministry calling for one countrywide uniform sales tax system.
IEX India which is India’s first stock exchange of the electricity sector.
is a monopoly business that is very profitable with operating margins of 80%+.
Hence the Natural Gas business opportunity is very large and attractive and could witness the same traction seen in the electricity trading segment it currently operates presently
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