The government has banned the producers of natural gas and coal-bed methane (CBM) from buying their own produce in the newly notified gas marketing freedom guidelines. On October 15, 2020, the government had notified the Natural Gas Marketing Reforms to give producers the freedom to discover the market price of gas through a standard e-bidding process. The notification gives them the liberty to market or sell the gas produced to anyone including affiliates. However, as per the notified guidelines, the producer or any member of its gas field consortium cannot bid for their own fuel.
The sale of fuel to affiliates is allowed if they participate in the open competitive process. However, the contractor or its constituents are not eligible to participate in the bidding process, as per the notification. Therefore, the seller and buyer cannot be the same entity.
The rule applies to both conventional natural gas as well as CBM.