The country is thought to have huge potential reserves of oil and gas -- perhaps the world's 15th-largest, reckons the Boston Consulting Group. But only about one-fifth of likely hydrocarbon-bearing basins are classified as "well explored". One reason is that the price domes- gas producers receive has been tightly capped at a dismal level: between $2 and $5 per million British thermal units (it varies by field and producer). Imported LNG fetches much more -- around $12.

One of India's big strategic worries is energy security. It imports most of its oil. It has lots of coal but struggles to dig it up, mainly because of the state mining monopoly's ineptitude. Gas is in demand but too little is pumped: by 2016 two-fifths of India's supply is likely to come from expensive imports of liquefied natural gas (LNG). All this leaves India exposed to supply interruptions in the Middle East and elsewhere, and strains its balance of payments.

The government at last bit the bullet on June 28th, unveiling a part-liberalisation of prices. Its new formula, based on a mix of the cost of imported LNG and gas prices on world markets, will mean producers get $8.40 from next April. The change should spur investment but is controversial. Industries that use lot of gas fear a financial shock. As a result, the state will cushion the impact of higher prices on fertiliser-makers, and gas-fired power stations will be allowed to pass the increased cost onto customers. Thank you.