The government has deciÂded to supply gas at regulated rates only to a few top-priority consumers – a move that will grant Reliance Industries (RIL) substantial pricing freedom and boost the government's share of revenue from the KG-D6 field when output rises.
The government is respoÂnding to the steep fall in output from the KG-D6 gas field. The shortfall has prompted the oil ministry to order Reliance to cut supplies to 'non-core' sectors such as steel to help power and fertilizer plants get normal supply.
Steel companies have already challenged the order in court, but the proposed new priÂcing policy will make sure that such customers pay market raÂtes for gas when it is available. Reliance Industries wants to monitor data from the D-6 reservoir for a few quarters before it takes steps to ramp up production to normal.
In the new pricing regime, gas at the regulated price of $4.2 per unit would be supplied only for use in making fertilisers, subsidised cooking gas, city gas networks and power statiÂons that do not indulge in lucrative open-market sale, two government officials said requeÂsting anonymity.
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