Page 43 - Policy Economic Report - December 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

fiscal incentives have been provided for early monetization of fields along with Marketing and Pricing
freedom for natural gas. Further, Government in 2020 allowed market price discovery through e-bidding
system and in 2023 permitted a premium of 20% over the Administered Price Mechanism prices for gas
produced from new well and well interventions of Oil and Natural Gas Corporation Limited & Oil India
Limited from their nomination fields.

Ministry of Power has informed that existing Gas-Based Plants (GBPs) in the country remain underutilized
due to the high cost of electricity generation. To meet increased demand during crunch periods, the
Ministry of Power implemented Schemes for procurement of power from GBPs during peak demand
periods in 2023, 2024 and 2025 through competitive bidding. Selected GBPs have been provided with a
Minimum Off-take Guarantee (MGO). During the crunch periods of 2023 (April–June 2023), 2024 (March–
June 2024) and 2025 (March–October 2025), energy procured from the selected GBPs under these
schemes was 317 MU, 482 MU and 1,477 MU respectively. This Scheme, inter-alia, helped in improving
the utilization of gas-based assets, provided additional peak support to the grid, and contributed to
maintaining system reliability during periods of elevated demand. The PLF of gas-based power plants has
increased from 11.4% during 2022-23 to about 15 % during 2024-25.

In addition, Ministry of Power have issued directions under Section 11 of the Electricity Act for
maximization of generation from gas-based stations during the periods 26th May 2025 to 30th June 2025
and 1st May 2024 to 30th June 2024.

Policy initiatives to boost gas-based power generation and improve Plant Load Factor (PLF) of gas-based
plants are expected to strengthen energy security by diversifying the energy mix and reducing reliance on
coal and oil.

Shri Manohar Lal Inaugurated Commercial Operation of the first Unit of Country's Largest Hydropower
Project

Shri Manohar Lal, Union Minister of Power, Housing & Urban Affairs, inaugurated the commercial
operation of Unit–2 (250 MW) of the 2000 MW (8×250 MW) Subansiri Lower Hydroelectric Project
through virtual mode. He stated that the commissioning of this unit is “not just a technical achievement,
but a testament to years of hard work, dedication, and teamwork.” He further emphasized that the
Subansiri Project stands as a symbol of India’s commitment to clean and sustainable energy, supporting
North-East India’s growth, strengthening the national grid and advancing India’s ambitious Net Zero goals.

The event was also attended by Shri Pankaj Agarwal, Secretary (Power), Shri Bhupender Gupta, CMD,
NHPC, and other officers of the Ministry of Power and NHPC.

Shri Pankaj Agarwal lauded NHPC’s achievement, highlighting that the Subansiri Lower Project will greatly
improve energy supply in the North-East and serve as a testament to India’s commitment to state-of-the-
art, sustainable power systems. He emphasized timely commissioning of the remaining units, noting that
the Subansiri Project will continue to play a pivotal role in India’s transition to a Net Zero energy future
while generating substantial socio-economic benefits for local communities.

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