The Government on Friday notified the new gas pricing policy that would be applicable to all domestically produced natural gas from April 1 for the next five years.
However, Reliance Industries and its foreign partners BP and Niko Resources in the KG-D6 block would have to submit a bank guarantee before they can avail themselves of the new price.
“The prices determined under these guidelines shall be applicable to all consuming sectors uniformly. In respect of D1 and D3 gas discoveries of Block KG-DWN-98/3 (KG-D6), these guidelines shall be applicable subject to submission of bank guarantees in the manner to be notified separately,” a Petroleum & Natural Gas Ministry notification said.
The new gas pricing mechanism, as suggested by a panel headed by Prime Minister’s Economic Advisory Council Chief C. Rangarajan, has been given the go-ahead by the Cabinet Committee on Economic Affairs (CCEA).
Petroleum Secretary Vivek Rae on Thursday said that gas pricing notification could be expected anytime soon. Speaking to reporters at an industry event, Rae had also said that the Government will put on offer 46 oil and gas blocks next week.
On the constraints felt by ONGC and Oil India due to Government policies, the Secretary had said that the two public sector explorers were unable to drill nearly 70 million tonnes of crude oil, as the heavy subsidy burden prevents them from investing in discoveries.
“They need more money to monetise some of the discoveries. There are certain discoveries viable at least $65/barrel. If they get only $40-42/barrel, they cannot develop them,’’ Rae said. These discoveries are in Bombay High and KG basin in the East Coast. Nearly 70 million tonnes of crude oil resources are trapped in these acreages.