India Asks Qatar to Cut LNG Price

India has asked Qatar to cut LNG prices to match the recent slump in gas price, news agency Press Trust of India reported Monday.

The two countries signed a 25 year contract, indexed to a moving average of crude oil price, under which Indian buys 7.5 million tons a year of LNG.

The price of LNG from Qatar comes close to $13 per million British thermal unit as compared with $6-7 rate at which it is available in the spot or current market, Press Trust reported.

The high price of LNG under the long-term contract has led to users in fertiliser and power industry finding it cheaper to use alternate fuels like naphtha and fuel oil, a source told the news agency.

Petronet LNG Ltd, which has been buying LNG from Qatar on a long-term contract since 2004, has asked for a 10 per cent cut in import volumes this year.

"The contract is a take or pay wherein the buyer has to take the contracted volume every calendar year or pay for it. But the contract also provides for a flexibility that gives the buyer (the option) to defer taking 10 per cent less of yearly supplies. These volumes can be taken at anytime during the duration of the contract," Press Trust quoted the source the source as saying.