Indian energy: A price worth paying 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. India has not encouraged enough exploration and production at home. In the past 15 years only $16 billion has been invested in oil- and gasfields in India. That is under half of what Brazil has spent, and is less than India's own energy firms have put into buying and developing fields abroad. Although there have been auctions of exploration rights in India, few foreign firms have a big presence. BP paid $7 billion in 2011 for a stake in the offshore fields of Reliance Industries, but the deal is generally seen as a dud, since production in the venture's main field has fallen. 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 domestic 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. 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 lots 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 on to customers. An explosive charge being made in some quarters is that the new regime is the result of cronyism and will allow well-connected production firms to profiteer from their existing assets. This seems hard to substantiate. Most investors still doubt that Reliance will make a decent return on the fortune it has sunk into its fields. State-owned production firms may have any windfall profits grabbed back by government. Of course, if there is a surge in new investment that leads to vast new discoveries of gas, fortunes will be made. But that would be a price worth paying for a secure and abundant source of energy.