Whalesbook
Demand Surge Fuels Record Gas Trading
Trading volumes on the Indian Energy Exchange (IGX) recorded a near 79% month-on-month surge in April, reaching approximately 215.16 million metric standard cubic metres (MMSCM). This marks a significant increase in activity, driven primarily by escalating demand for electricity during the early summer heatwaves. Power producers have increasingly turned to the spot market to meet critical energy needs, especially during non-solar evening hours when thermal plants face added stress.
Price Rally Amid Supply Squeeze
The exchange's benchmark gas price index, GIXI, climbed 58% from the previous month to $16.9 per MMBtu, a year-on-year increase of 49.10%. This price rally is attributed to a confluence of factors including supply disruptions in global LNG trade flows and tightening domestic gas availability. Higher spot gas prices mean increased costs for power generation and city gas distribution networks.
Domestic vs. Free Market Gas Dynamics
More than half of the traded gas volumes in April, approximately 53.08%, comprised domestic high-pressure, high-temperature (HPHT) gas sold at the ceiling price. This segment was largely procured by city gas distribution (CGD) companies for piped natural gas (PNG) and compressed natural gas (CNG) needs. The remaining 46.92% consisted of free market gas. Producers traded nearly 17.52 MMSCM of domestically produced gas with pricing freedom from various delivery points.
Regional Imbalances Persist
Regional gas prices also experienced sharp increases. GIXI-West remained broadly in line with the all-India benchmark, while GIXI-East and GIXI-South saw price jumps of 59.04% and 45.24% respectively. These regional variations highlight ongoing supply-demand imbalances and transmission limitations across the country. The GIXI-Dahej benchmark settled at approximately $16.3 per MMBtu, up 56.09% month-on-month.