End of gas power subsidies will hit Indian demand

By Garima Chitkara 21 April 2017
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The onshore terminal for the KG-D6 block. Output from the block has been lower than expected. (Niko Resources) The onshore terminal for the KG-D6 block. Output from the block has been lower than expected. (Niko Resources)

India’s gas producers are concerned the end of an important subsidy for gas-fired power will lead to a significant drop in the country’s demand for the fuel.

A subsidy scheme introduced in 2015 under the government’s Power System Development Fund pays the owners of gas plants the difference between the cost of the LNG used for generation and the price of gas implicit in the agreed tariff the electricity is sold for. However, the scheme ended on 31 March this year.

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