USD133.86 Million Saved by Halving Import Duty on LNG in India

Reduction in import duty on LNG set to surge the demand for LNG market in India

India: The Government of India is set to increase the share of natural gas usage by 8.5% till 2020. To do so, the import duty on LNG has been reduced to 2.5% which was initially 5%. This step will result in increased use of cleaner fuel and a saving of USD133.86 million rupees for gas consuming industries. Currently, the import duty is USD0.35 per million British thermal unit (mmBtu) on LNG price of USD7 per mmBtu which will reduce to USD0.175 per million British thermal unit.

TechSci Research depicts that reduction in import duty on LNG will upsurge LNG usage in India. Because of increased usage, an increase in LNG import will also be witnessed. This step will not only benefit gas consuming companies, but also will help in keeping India clean and green. An overall reduction in LNG price will lead to an increase in its number of consumers, thereby, making it more competitive over liquid fuels. A deficiency in gas supply shows that LNG market share will be increasing tremendously soon. 

According to released report of TechSci Research, “India LNG Market Forecast and Opportunities, 2025”, upcoming LNG terminal projects, surging demand for natural gas in India and cost-effectiveness of LNG as compared to other alternative fuels are among the major factors anticipated to positively influence the country’s LNG market scenario over the next ten years. Government has also announced revised guidelines in “Gas Allocation Policy” to prioritize natural gas supply to various end-user segments that include City Gas Distribution for households and transport sector, fertilizers sectors (urea plant), power plants and industrial sector.