India’s first gas exchange – IGX.


If you are thinking about making use of the money lying at your disposal, you’re going to get this opportunity very soon through India’s first natural gas exchange – IGX.

As a matter of fact, from Monday, India will have its own natural gas trading platform, on which trading profits you can make. According to official sources, oil minister Dharmendra Pradhan has launched India’s first gas exchange (IGX) on Monday to start trading in natural gas. IGX is believed to be India’s first automated national level trading platform to promote and maintain an efficient and robust gas market. Gas trading in the country will be encouraged through this.

On this platform, buyers and sellers will have access to trading in spots and forward contracts at a designated physical hub. IGX will be a neutral and transparent marketplace where both buyers and sellers trade gas as the underlying product. IGX will make the natural gas market more efficient and lead to a competitive search for gas prices (determining the price of a property in the market). One of its important objectives is to maintain the integrity of the market. It is proposed to start trading in physical centres at Hazira and Dahej in Gujarat and in Kakinada, Andhra Pradesh will start a new hub later on.

What would be the role of the exchange-

Finding a price in which the exchange is required to obtain time specified (time entry) bids from buyers and sellers on which price discovery mechanism will be run to deal with gas delivery. It will offer six market products, including the next day (day ahead), daily, weekly, weekdays, fortnightly (15 days), and monthly. Some of these will be available from the first day of trading, which is June 15, while some will be offered later.

Three mock trading sessions have been conducted successfully so far.

The IGX, which received a substantial response from the industry has the technology platform that offers a fast, accurate, secure, and efficient trading facility to meet the requirements of the pre and post-trade functionalities and capacity for handling complex orders. According to the sources, bids will be monitored safely to ensure the highest integrity and effectiveness of the market

Producing domestic gas will also be bought and sold on the exchange?

Natural gas produced domestically will be valued by govt. it will not be sold on gas exchange.

However, following an appeal by the domestic producers that the prices fixed by the government are not viable in view of the cost of exploration and production in India, Union Petroleum Minister Dharmendra Pradhan has indicated that the new gas policy in domestic gas pricing will improve and lead to market-oriented prices.

IGX officials said the highly liquid gas exchange can substantially help in moving away from the government’s domestic gas pricing.

Will it make India more import-dependent?

Domestic gas production in the last two fiscals has been falling as current sources have become less productive. Natural gas produced domestically accounts for less than half of the country’s natural gas consumption; imports of LNG accounts for the other half.

LNG imports are all set to become a major part of domestic gas consumption as India aims to increase the proportion of natural gas in the energy basket from 6.2% in 2018 to 15% in 2030.

What Union minister said?

The Union Minister said on this occasion that the launch of a new electronic platform for gas was to open a new chapter in the history of India’s energy sector. He said it would set the price of natural gas in the open market.

Like the other exchanges, IGX will also play a key role in looking for competitive prices of natural gas. IGalready has 12 members and 350 of its registered clients associated with the industry.

Disclaimer :- This post is independently published by the author. Infeed neither backs nor assumes liability for the opinions put forth by the author.

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