Gas Buyers Urge Rupee-Denominated Pricing

17 Jan 2025 , 09:34 AM

There are requests to price domestic gas in rupees rather than dollars, as the rupee’s sharp decline is making natural gas more expensive for Indian consumers.

On the global market, the price of gas and oil is expressed in dollars. Oil and gas become more expensive for Indian importers who must pay more rupees for the same amount of purchase due to the rupee’s depreciation against the US dollar, which has decreased by ₹3.65 in a year and ₹1.65 in a month to ₹86.56.

Locally generated gas and oil in India are similarly valued in US dollars, and their prices change in tandem with the exchange rate.

India imports around half of its gas, with the remaining portion being produced domestically. About 12% of the country’s oil demand is met by indigenous production. Gas customers are more outspoken about the cost increases they are seeing as a result of currency depreciation because gas accounts for a much larger portion of domestic production than oil.

Gas consumers seem to mainly perceive dangers in dollar-denominated pricing because the rupee has largely moved in a single direction over the past few years.

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