India first gas exchange launched

What Is an Exchange?

An exchange Market is a marketplace where securities, commodities, derivatives and other financial instruments are traded.
The core function of an exchange Market is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange.

India first gas exchange launched

An exchange Marketplace may be a physical location where traders meet to conduct business or an electronic platform.

India first gas exchange launched

Trading is progressively being conducted on electronic exchanges Market.
Similarly there are exchanges where Commodities are exchanged on online platforms.

How will the gas exchange work?

The IGX (India’s First Natural Gas Trading Platform.) is a digital trading platform that will allow buyers and sellers of natural gas to trade both in the spot market and in the forward market.
The gas exchange will be managed by India Energy Exchange.

Power trading exchange regulated (PTER) by the Central Electricity Regulatory Commission(CERC).
IEX (Indian Energy Exchange) started its operations on June 27, 2008.

India first gas exchange launched

For the time being trading will take place only in imported natural gas across three hubs

India first gas exchange launched

Dahej and Hazira in Gujarat State, and Kakinada in Andhra Pradesh State.

India first gas exchange launched

What about domestically produced natural gas?

The price of domestically produced natural gas is decided by the Central government (india). It will not be sold on the gas exchange of India.
However, following appeals by domestic producers that the prices set by the government are not viable given the cost of exploration and production in India Power Sector, Ministry of Petroleum and Natural Gas Dharmendra Pradhan has indicated that a new gas policy will include reforms in domestic gas pricing, and will move towards more market-oriented pricing.

Its impact?

The exchange Marketplace is expected to facilitate transparent price discovery in natural gas, and Facilitate the growth of the share of natural gas in India’s energy receptacle.
Domestically produced natural gas currently accounts for less than half the country’s natural gas consumption; imported LNG accounts for the other half.
LNG imports are set to become a larger proportion of domestic gas consumption as India moves to increase the proportion of natural gas in the energy basketfrom2% in 2018 to 15% by 2030.

India first gas exchange launched India first gas exchange launched