Gas price could range between $7 and $8/unit: Oil Secretary
April will see prices for piped gas for cooking and vehicles run on CNG further revised, as the Government is likely to announce the new price for domestically produced in March. This price will be effective from April 1.
Secretary Petroleum & Natural Gas Vivek Rae said on the sidelines of the Petrotech 2014 that it will be difficult to give what the price will be but it could range between $7 and 8/unit (gas is measured in million British thermal units) if current international gas price is any indicator.
As regards applicability of new price for Reliance Industries Ltd operated KG-D6 producing fields, the Secretary said that the assessment of bank guarantee will be based on the initial assessment target of the quarter under review. Simply put the production shortfall of the said quarter will be the deciding factor.
Rae said that modalities are being worked out. The point is that the decision on gas price revision has been taken and notified, he stated.
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).
Tongue-in-cheek, the Secretary said that now there will be more gas in the country.