On Day 2 of India Energy Week 2026 (IEW 2026), the speakers emphasized the energy policy of India, which emphasized disciplined price discovery and transition. With the growth of global LNG supply, India is turning out to be a benchmark-driven swing market, which accesses spot and short-term LNG when prices are attractive compared to domestic alternatives.
India is also moving ahead with the adoption of biofuels to promote transport sector decarbonization. This is in line with the theme of IEW 2026, which is “Energising Growth, Securing Economies, Enriching Lives” and promotes the use of gas benchmarks and the scaling up of ethanol and sustainable aviation fuel.
The LNG plans of India are undergoing changes in the wake of the rise in global LNG supplies:
According to Kenneth Foo, Global Director for LNG price reporting, S&P Global Energy, “As the pace of global LNG supply growth accelerates, India is becoming an increasingly benchmark-driven swing buyer, entering the spot or short-term market in the wake of dislocations between WIM vs Henry Hub vs Brent-linked pricing. India’s total LNG imports in 2025 were slightly under 26 mtpa. An incremental 3.5-4 mtpa of long-term contracted supplies is scheduled to commence from 2026. With increased term supplies, there is little room for spot LNG in 2026, particularly if prices are uncompetitive vis-à-vis propane, naphtha, and fuel oil.”
Benchmark pricing and floating structures are on the rise:
The early 2026 pricing regime made LNG briefly competitive with propane in India, and this fueled demand, though it also reflected the high price sensitivity of the market. The current low JKM and WIM regime is propelling the use of floating price structures for LNG, with WIM being the key reference price for RLNG and LNG transactions.
The soft outlook for LNG and crude implies that incremental demand from refineries and industrial sectors will depend on the competitiveness of LNG against non-LNG priced volumes. Gas-based power demand in this summer could impact spot demand, and the usage of WIM in power tenders further cements its importance in the market. Geopolitical risks, especially in Russian LNG after 2027, are contingent on pricing and risk appetite.
Biofuels and SAFs are scaling up to support decarbonization objectives:
“Decarbonization objectives are propelling the demand for Sustainable Aviation Fuel (SAF). India has set up SAF blending targets of one percent by 2027 (approximating 45,000 mt), two percent by 2026, increasing towards five percent by 2030, which is encouraging the sector to develop production at scale through various means, such as waste-based and ethanol-to-jet processes, utilizing both crop and non-crop ethanol feedstocks. The current supply chain is based on co-processed SAF through existing refineries, utilizing the HEFA process and mainly using used cooking oil feedstocks. More generally, SAF policy structures are being developed in Asia with blend targets largely volumetric; however, cost competitiveness, feedstock access, and regulatory support will ultimately drive scale-up,” stated Sophie Byron, Global Director for Biofuels Price Reporting, S&P Global Energy.
Asia’s ethanol market grows with increased blending requirements:
The biofuels market in Asia is on the verge of a major expansion, thanks to increased gasoline blending requirements and the increasing interest in the production of biofuels in the region. India is at the forefront of this expansion, as it is rapidly increasing its ethanol production capacity, including corn-based ethanol, with the aim of achieving E20 gasoline blending of over 10 billion liters per year.
Countries such as Vietnam, the Philippines, and Indonesia are also increasing their blending requirements, making the region a rapidly expanding market for ethanol. However, after the year 2035, the blending requirements for ethanol in Asia are expected to stabilize as the demand for gasoline peaks.
