BP India Chief: India-UK free trade agreement to boost energy cooperation, investments
The long-coveted free trade agreement between India and the UK will pave the way for increased collaboration and investment in the energy sector, including in renewables, according to Kartikeya Dube, Head of Country and Chairman bp India. “The UK India Free Trade Agreement (FTA) is a great step towards enhancing trade relationship between two partner nations,” he said, commenting on the historic signing of the pact. The world’s fifth and sixth largest economies on Thursday signed a landmark free trade agreement that will cut tariffs on goods from cosmetics and textiles to whisky and cars and allow more market access for businesses in the two nations. The deal, the UK’s biggest such agreement since Brexit and India’s first with a European economy, aims to expand the 42.6 billion pound trade by a further 25.5 billion pounds by 2040. The pact was signed during Prime Minister Narendra Modi’s visit to the UK. “This will only enhance easier trade of goods and services but will also enable a seamless flow of talent and expertise,” Dube said. “In the energy sector, this will encourage collaborations and investments including renewables.” Under the FTA, 99 per cent of Indian exports will face zero duties in the UK. In return, Britain’s exports to India will see a 90 per cent cut in duties, with most goods becoming fully tariff-free within a decade. While India has opened up its market to several categories of consumer goods, including chocolates, biscuits, meats and cosmetics, New Delhi will get to export textiles, footwear, sports goods and toys, among others, to the UK.
Russia Oil Trouble Hits: Shipowners And Oil Traders Avoiding Russia-Backed Nayara Energy In India; Impact After EU Sanctions
European Union’s latest round of sanctions on Russian oil have already begun to hit a refinery in India. Oil companies and vessel operators are distancing themselves from India’s Nayara Energy Ltd., following the European Union’s recent sanctions that specifically targeted the company. According to shipbrokers, vessel operators have become hesitant to engage with Nayara this week, whether for exporting refined products or importing crude oil. The Indian refinery has Rosneft PJSC as a significant shareholder, holding a 49.13% stake. Ship-tracking information from Bloomberg revealed that a vessel called the Talara reversed course and departed from Vadinar port on Sunday. According to shipbrokers, the vessel was scheduled to collect a fuel shipment, presumably diesel, from Nayara. However, the scheduled collection was cancelled in response to Friday’s sanctions, leaving the cargo unloaded.
India’s gas supply dries up amidst price swings
India’s gas-fired power sector is facing a severe decline, with its share in the country’s electricity mix falling to just 2% from 13% more than a decade ago largely due to volatile global prices and limited production, according to analysts. Thirty-one gas power plants that accounted for 32% of the nation’s total gas-based generation capacity have failed to produce electricity this fiscal year and are now considered stranded assets, according to the Institute for Energy Economics and Financial Analysis “High and unstable liquefied natural gas (LNG) prices make it less appealing for Indian industries, especially for fertiliser production, which uses the most energy in India,” Purva Jain, an energy specialist for gas and international advocacy at IEEFA, told Asian Power. Gas-fired power is losing out to more competitive renewable energy sources, she pointed out. She noted that while the government provides significant subsidies to the fertiliser sector to mask the real cost of gas, this came at a heavy fiscal cost. “Whilst this helps consumers, it cost the government a huge $30 billion in 2023 after gas prices jumped in 2022.” Despite government intervention, high LNG prices continue to limit gas competitiveness. Jain noted that even at a delivered LNG price of $8 per million British Thermal Units (MMBtu), the cost of electricity from gas rises to ₹17 per unit—compared with ₹5–₹6 for coal and ₹6 for solar-plus-storage. “India’s fuel prices must fall to $5 to $5.7 per MMBtu for gas-fired power plants to compete with coal and renewables,” she added. However, the International Energy Agency (IEA) projects a 60% increase in gas use by India’s power sector by 2030, targeting a 15% share in the country’s total energy mix. “With an existing LNG import capacity of close to 50 million tonnes per annum and more under construction, India will have the import infrastructure to support this,” Paul Everingham, CEO at the Asia Natural Gas and Energy Association, said in an emailed reply to questions. But distribution networks behind the import terminals must be expanded, he added. Jain said most LNG import terminals are underused, with six out of seven operating below 50% capacity last fiscal year. Regulatory reforms are now being proposed to address these infrastructure bottlenecks and improve gas market planning, she added. Everingham expects global LNG supply to grow significantly, with new volume from the US, Australia, and Qatar. These will have “a positive impact on the affordability of LNG for nations like India, particularly if long-term supply contracts can be implemented,” he added.