India is witnessing major economic reforms and the energy sector is no exception. Under liberalized policy the Oil and Gas industry, which was hitherto heavily controlled, is steadily moving towards decontrol at all levels. Being the largest democracy in the world, the energy requirements of India are immense. Though the average per capita consumption of petroleum in India is just 113 Kg against the world average of 927 kg, the demand for hydrocarbons in is growing very rapidly. Over the years the consumption of energy has grown at 6-7 per cent per annum whereas the world average is 1.5 per cent per annum. The consumption of petroleum products in India is expected to grow from a level of 97 million tons (MMT) in 1999–2000 to about 180 MMT in 2006–07 and further to around 370 MMT by 2024–25. The demand of Natural gas is expected to be 230 MMSCMD by 2006–07 and to increase to about 390 MMSCMD by 2024–25.

Indian Oil and Gas sector, till the mid 1970s, was operating as a free market and many of the multinational oil companies had a significant presence in India. Nationalization of the oil industry resulted in these players being taken over by the government. Since then state owned ‘Public Sector Undertakings’ (PSUs) have played a dominant role in the Oil and gas sector and the prices of end products were controlled by the Federal Government through a system of Administered Prices. However, Government of India has now dismantled the Administered Pricing Mechanism (APM) and has moved to the market determined pricing for petroleum products from 1st April 2002.

Gas use in India Presently about 67 MMSCMD of natural gas is consumed by industries in India. Major consumption is by the core sectors of Fertilizer and Power, which together consume nearly 75 % of the total gas consumption.

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As one of the fastest growing markets for energy in Asia, India's demand for energy is increasing by leaps and bounds and Natural Gas is poised to play a prominent role in the future. The India Hydrocarbon Vision-2025 has projected that the demand for gas will increase from a level of 151 MMSCMD at present to 231 MMSCMD by 2007, to more than 313 MMSCMD by 2012 and almost 391 MMSCMD by 2025. The growth in the gas demand would be mainly driven by new capacities required in the power sector and the fertilizer sector. 400 391 322 313 300 231 216 200 166 151 MMSCMD 117 100 70 58 45 36 0 2002 2007 2012 2025 Year LOW DEMAND HIGH DEMAND SUPPLY The burgeoning gap between demand and supply of natural gas has impelled the Govt. to promote import of natural gas. India is one of the largest emerging gas markets in the world. The share of gas in the commercial energy consumption is about 9% and the domestic gas pr

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