Even as the union cabinet recently approved the hike in domestic natural gas price to $8.4 million metric British thermal unit (mmbtu) from April 2014, the government does not stick to any fixed price, some media reports indicate. According to these reports, the government has left the market condition to fix the price based on the formula proposed by the Rangarajan committee
Tag: fuel
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Department suggests cap on gas pricing under new regime
The department of expenditure of the union finance ministry suggested the oil ministry to fix a ceiling price for domestic natural gas under the Rangarajan formula. On June 27, the Cabinet Committee on Economic Affairs cleared the adoption of the Rangarajan pricing formula for domestic natural gas from April 2014. But while adopting this formula, the expenditure department suggested that gas producers should not be allow
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Govt to release remaining dues to OMCs
Media reports indicate that the government would release the remaining dues to state-run oil marketing companies (OMCs) towards the under-recoveries incurred by these firms while selling fuel products at subsidised price. Earlier, Prime Minister Manmohan Singh asked the finance ministry to pay Rs 45,000 crore as its share of subsidy for Jan-Mar 2013 quarter
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Power producers lobby for diversion of gas
Power developers who run natural gas-based power plants are lobbying for the diversion of gas supply from the fertiliser sector and lowering of the plant capacity for recovery of fixed costs and assured return on equity. Amish Shah of Credit Suisse Research said this in a recent report. Owing to shortage of gas supply, power plants of Lanco, GMR, GVK, Essar, NTPC, RGPPL, Torrent, VBC Group — with a total capacity of 9,861 mw — are funct
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Govt to decide on diverting gas to power sector
Government would decide on whether to increase the supply of natural gas to power sector by diverting a part of the existing supply to fertiliser sector. Fertiliser plants in India get 43.6 mscmd of natural gas at present. Of this, 19.5 per cent (8.5 mscmd) comes from imported liquefied natural gas (LNG). Some reports indicate that the fertiliser plants may have to import 45-50 per cent of their total gas
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Oil ministry adopts finance ministry’s terms of reference
Reports indicate that the union petroleum ministry adopted the terms of reference proposed by the finance ministry for the committee set up under former Planning Commission member Kirit S Parikh. Originally, the oil ministry had proposed that the committee be asked 'to revisit the current pricing methodology of import parity or trade parity' for petro
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Ministry note justifies gas price hike
An internal note circulated by the petroleum & natural gas ministry has justified the recent decision of the union cabinet to almost double the domestic natural gas price to $8.4 per unit. The note argued that the current price of $4.2 was not viable for “sustenance of the domestic production of gas and all the operators are demanding an increase in price
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CCI chief warns of cascading effect from gas price hike
President of the Confederation of Indian Industry (CII), S Gopalakrishnan said the government’s move to almost double gas prices with effect from April 2014 will have a “cascading effect” on power tariffs. He said this while addressing a press conference. He disfavoured the dollar pricing of domestically produced natural gas by saying the following, “I do not believe that the price of gas (produced in India) ought to be se
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Gas price hike may fetch $2.2 bn more income to govt
A report by brokerage firm Bank of America Merrill Lynch shows that government may get an additional revenue of $2.2 billion owing to its decision to double domestic natural gas price. The government would use this additional revenue, which it may get through higher taxes and profit, to fund rise i
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Weakening rupee may hit finances of OMCs
The financial position of state-run oil marketing companies (OMCs) may be adversely affected because of the depreciation of rupee against the dollar. Rupee's depreciation would put strain on the working capital of oil companies. Some reports indicate that the borrowing of oil companies, which was in the range of Rs 1.5 lakh crore, may rise further if they don't raise domestic fuel prices to compensate for the rise in import cost.