Union Oil Minister M Veerappa Moily informed that the draft note on raising the price of natural gas is under circulation before all the ministries. He also said that his ministry would send the proposal to the cabinet after the consultation of various ministries.
The draft note proposes to raise the price of gas produced by state-owned ONGC and OIL from 2013 itself and that for Reliance Industries in 2014.
This means that RIL would get the new price only from April 2014 upon expiry of the fixed five-year term of current rate of $4.205 per million British thermal unit.
However, Oil and Natural Gas Corp (ONGC) and Oil India (OIL) can get the new price this year itself for gas they produce from fields given to them on nomination basis by the government. Gas from nominated fields, called APM gas, is currently priced at $4.2 per mmBtu.
This follows the recommendation of the Rangarajan Committee on pricing natural gas at an average of international hub prices and cost of imported LNG.
It wants this pricing formula to apply to all forms of natural gas – conventional, shale and coal-bed methane (CBM). Also, the price determined shall be applicable to all consuming sectors uniformly.
Moily said though some timelines have been indicated in the draft note for user ministries like power and fertilizer to send in their comments, “sometime deadlines do not work.”
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