BP and Niko Resources, partners in the Reliance Industries Ltd-operated KG-D6 block, will have to pay the difference between the new and the current gas rates into a special account, if they are not accepted as party to the Indian firm’s ongoing dispute with the Government.
This would mean that the firms will not be able to benefit from the new gas price when notified.
Giving a status report on the gas pricing issue sought by the Prime Minster’s Office, Petroleum & Natural Gas Secretary Saurabh Chandra wrote that “In case BP and Niko do not become parties in the arbitration either by virtue of the judgment of the Supreme Court or by not giving formal arbitration notice, then it is proposed to deposit the price differential… in the gas pool account maintained by GAIL in the interim or any other account as suggested by the Department of Expenditure.”
While BP and Niko have given arbitration notice, it is yet to be accepted.
A senior Petroleum Ministry official told Business Line, “A final decision on this will have to be taken by the Cabinet. “Any decision could be expected only after the model code of conduct is over (May 17).”
The Cabinet Committee on Economic Affairs had approved the revised Natural Gas Pricing Formula in 2013. The guidelines were notified in January and were to come into effect from April 1.
However, following the Election Commission’s view, the Government deferred implementation of the new gas price.
In December 2013, the CCEA had decided that RIL would be allowed to sell gas produced from D-1 and D-3 gas fields in the D6 block at the revised price from April 1, 2014 provided it gives a bank guarantee for the unmet supply commitments from the fields.