According to source-based information, union power ministry opined that base price of domestic natural gas beyond $5 per mmBtu is unviable for power sector.
The ministry is learnt to have said this in a note to the
Cabinet Committee on Economic Affairs (CCEA), which would decide on whether to raise the price of domestically produced gas in line with the recommendation of the Rangarajan Committee.
Union oil ministry wants the price to be determined as per a complex international hub and imported LNG based formula suggested by the committee.
However, if the price of domestically produced gas is raised, it would affect the 18,000 mw of gas—based power production capacity in the country.
Of the 18,000 mw, 30 per cent is stranded for want of fuel. Another 1,000 mw gas based power plants are at advanced stage of commissioning.
The current price of $4.2 translates into a delivered price of $5.3-6.93 for consumers after including sales tax, margin and pipeline transportation charges.
At base price of $8 in 2014, RIL’s KG—D6 gas will cost $9.5 to consumers in Andhra Pradesh, $10 in Maharasthra and Gujarat and $10.83 in northern India.
Leave a Reply
You must be logged in to post a comment.