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Our Bureau

New Delhi, Aug. 28 The meeting of the empowered group of ministers (EGoM) headed by the External Affairs Minister, Mr Pranab Mukherjee, constituted to decide on the issue of gas pricing remained inconclusive for the second day today. According to sources, the EGoM is likely to meet on again sometime this week.

The issue of gas pricing rose when Reliance Industries Ltd (RIL) approached the Petroleum Ministry seeking approval for its Krishna-Godavari basin gas pricing formula. The EGoM is considering the views of all the stakeholders, and suggestions of the Cabinet Secretary and Economic Advisory Council of the Prime Minister on the issue.

The discovered wellhead price proposed by RIL was $4.33 per million British thermal unit (mBtu). The delivered price would be in the range of $4.76-5.98 per mBtu without taxes.

At its first meeting on Monday, the Petroleum Ministry made its presentation. The Petroleum Ministry had said that the Government had no role in fixing price and use of gas produced from areas auctioned under the New Exploration Licensing Policy (NELP). As per production sharing contracts (PSCs) signed with exploration companies, the Government can only approve the gas price formula and not fix the price.

The Ministry had also said that PSC talks about gas utilisation policy and not allocation. The PSC recognises market-based arm’s length pricing as the only criteria.

Stakeholders like the Power and Fertiliser Ministries and the State Government of Andhra Pradesh have been voicing concern over the pricing proposed by RIL.

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