A high-level expert committee appointed by the Petroleum and Natural Gas Regulatory Board (PNGRB) has recommended wide-ranging reforms to overhaul India’s natural gas ecosystem and build a fully competitive market driven by transparent price discovery. The proposals, outlined in the report Vision 2040 – Natural Gas Infrastructure in India, argue that market-linked pricing, open access to infrastructure and stronger trading mechanisms are essential for accelerating the country’s clean energy transition.

Chaired by former PNGRB chief D K Sarraf, the panel said a liberalised framework would improve resource allocation, enhance investor confidence and attract a broader mix of players across exploration, pipelines, LNG terminals and city gas networks. India currently uses a mix of regulated prices, market-linked domestic supplies and LNG imports, a system the committee said leads to inefficiencies and distorts competition.

The report noted barriers such as resale restrictions in regasified LNG contracts, limited open access to pipelines, the absence of an Independent System Operator (ISO), and the lack of contract-path tariffs and location-based taxes. Despite being among the world’s fastest-growing gas markets, India still lacks a liquid trading hub for transparent price discovery similar to Henry Hub, NBP or TTF.

To address these gaps, the committee proposed establishing a neutral, not-for-profit ISO to manage pipeline scheduling, system balancing, settlements and transparent capacity allocation. It also suggested a unified digital platform for real-time pipeline capacity booking, backed by a bulletin board integrating SCADA data on flows, maintenance and outages.

For LNG import terminals, the panel recommended a clear third-party access framework with transparent tariffs, defined operating procedures, ‘use-it-or-lose-it’ norms and secondary capacity trading on authorised exchanges. It also called for lifting resale and destination restrictions in RLNG contracts to improve liquidity and align India with global market practices.

The group supported a move from route-based to entry-exit gas transportation tariffs, which would allow shippers to book capacities independently at entry and exit points and lay the groundwork for a virtual national gas hub and a future Indian benchmark.

To deepen participation on gas exchanges, the committee urged greater involvement of major consumers in fertiliser, power, CGD, refining and petrochemicals. It suggested removing caps on high-pressure, high-temperature gas trading, gradually bringing administered price mechanism gas into exchange markets, and rolling out Gas Release Programmes requiring a proportion of domestic or LNG supply to be traded on exchanges.

Aligning gas and power markets was another key recommendation, with proposals to synchronise operating timelines and introduce a day-ahead gas market with four six-hour trading blocks. The panel also backed a Renewable Gas Certificate mechanism for compressed biogas, enabling obligated and voluntary entities to meet blending targets through a regulated, market-based certificate system.

News source: CNBC TV18