Gas Trading Volume Declines 8% on Indian Gas Exchange Amid West Asia Supply Issues

Original: Gas trading volume drops 8% on IGX in March amid West Asia supply crunch

Mint•Apr 7, 20263 min

In a Nutshell

In March, the Indian Gas Exchange (IGX) reported an 8% drop in gas trading volume year-on-year, totaling 4.8 million mmBtu. This decline is attributed to supply disruptions from West Asia due to ongoing conflicts, impacting several industries, including fertilizers and steel.

Key Points

01Trading volume on IGX fell 8% year-on-year to 4.8 million mmBtu in March.
02The benchmark price index, GIXI, increased by 18% year-on-year to ₹998 per mmBtu.
03Approximately 93% of the traded volume was domestic gas at a ceiling price of $8.9/mmBtu.
04Supply disruptions from West Asia are significantly affecting India's LNG imports.
05The government has restored gas supplies for domestic fertilizer plants to 90% of pre-war levels.

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Full Summary

The Indian Gas Exchange (IGX) experienced an 8% year-on-year decline in trading volume, reaching 4.8 million metric million British thermal units (mmBtu) in March, primarily due to supply disruptions linked to the ongoing conflict in West Asia. Month-on-month, trading volume decreased by 11%. The GIXI benchmark price index rose to ₹998 per mmBtu, marking an 18% increase from the previous year. Domestic gas constituted 93% of the traded volume, priced at a ceiling of $8.9/mmBtu, while only 7% was from the free market. The supply crunch has adversely affected several downstream industries, including fertilizers and steel. In response, the Ministry of Petroleum and Natural Gas announced a restoration of gas supplies for domestic fertilizer plants to approximately 90% of pre-war levels. The government is also prioritizing natural gas for city gas distribution and promoting a model draft 'State CBG Policy' to foster a cleaner energy future.

Key Figures

4.8 million mmBtu

Total gas trading volume in March

₹998

GIXI benchmark price per mmBtu

8%

Year-on-year decline in trading volume

90%

Restored gas supply level for domestic fertilizer plants

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Why It Matters

The decline in gas trading volume and supply disruptions may lead to increased prices for consumers and affect production in key industries like fertilizers and steel.

Who is affected

Consumers relying on natural gas for cooking and industries dependent on gas supplies.

What to know

Consumers should monitor gas prices and industries should prepare for potential supply shortages.

FAQ

The decline is primarily due to supply disruptions from West Asia amid ongoing conflicts.

The government has restored gas supplies for domestic fertilizer plants to about 90% of pre-war levels and prioritized supplies for city gas distribution.

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