The Indian government is considering recovering royalties on natural gas flared by oil and gas producers, a move that could revive a long-running dispute over whether flaring is "avoidable" and subject to royalty payments.
According to people familiar with the matter, the move comes amid concerns that fuel equivalent to more than 800MW of electricity generation is being wasted every day, even as India imports half the gas it consumes.
The issue has gained significance as India grapples with energy supply pressures following the conflict in West Asia and Prime Minister Narendra Modi's recent appeal to conserve energy and reduce dependence on imports.
India's dependence on imported gas has added urgency to the issue, with the country consuming 68,542 million metric standard cubic metres of natural gas in 2025-26, of which nearly half came from imports.
Industry experts said reducing flaring is technically possible but often requires substantial investment in infrastructure and gas evacuation systems.
They argued that current gas pricing policies often make recovery of such gas commercially unattractive, and that incentives could be more effective than stricter regulation in reducing flaring.
