India's oil minister Mani Shankar Aiyar on Monday agreed to the deal with Iran for five million tonnes of liquefied natural gas annually over a 25-year period from 2009.

The contract was signed between the National Iranian Gas Export Company and three Indian firms - Indian Oil Company (IOC), Gail, and Bharat India - and came after three days of final negotiations between the oil ministers of the two nations.

The gas is needed to fuel demand from industry, vehicles and for cooking at home now estimated at 170 million cubic metres (222 million cubic yards) daily and expected to rise to 400 million cubic metres a day by 2025 as India's economy rapidly expands.

Domestic gas supply is currently 85 million cubic metres a day and imports are expected to make up the bulk of demand in the future in India, which imports 70 percent of its energy needs.

The move to use gas, a cleaner fuel than coal or diesel, was welcomed by a leading energy policy think tank but it cautioned that it needs to be accompanied by conservation to combat air pollution that is regularly higher than national standards deemed acceptable as more vehicles hit the roads.

"It's a question of lifestyle," said Ranjan Bose, research fellow at the Energy and Resources Institute, a New Delhi-based think tank that does studies for the government and companies on the sustainable use of natural resources and renewable energy.

"The growing number of vehicles is part of a lopsided policy that encourages consumption over conservation. While technology and cleaner fuels can reduce the pollution from more vehicles, at this rate the consumption of fuel will be much too high for clean air."

The total number of vehicles sold in India in the year ended March 2005, which includes cars, buses, trucks and motorcycles, rose 16 percent to 7.9 million units, according to the Society of Indian Automobile Manufacturers.

That rate of increase is expected to continue for the next several years, the society said, adding millions of vehicles to the more than 50 million that already ply the country's roads.

The effects of more vehicles on the road can be seen in reports from the federal Pollution Control Board which show that pollution levels in most of India's major cities have exceeded national ambient air quality standards for the past five years, Bose said.

He said Aiyar's efforts to secure new gas supplies would be good for the environment if the fuel is used at "anchor points" first such as power and fertilizer plants that now use coal or diesel.

He noted that cities like New Delhi have required buses, taxis and three-wheeled autorickshaws to use natural gas to reduce vehicle emissions in the city and air quality has improved as a result.

"But demand management of energy is the most important aspect for the environment. Transportation is the main contributor to air pollution and people need to see a civic responsibility in using less energy," Bose said.

All rights reserved. � 2004 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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