The Government is thinking of a review of gas allocation following the continued drop in domestic gas output.

Petroleum and Natural Gas Minister S. Jaipal Reddy said he proposes to raise the issue with the Power and other Ministries concerned, with particular reference to Andhra Pradesh.

Agreeing that Andhra Pradesh was reeling under a power crisis, the Minister said the priorities set by the Empowered Group of Ministers (EGoM) for gas allocation in 2008 may require to be reviewed. The Prime Minister’s Office has directed the Petroleum Ministry to maintain status quo as far as supplies to Andhra Pradesh is concerned.

This follows a representation by Andhra Pradesh Chief Minister Kiran Kumar Reddy to Prime Minister Manmohan Singh on Monday.

If the declining trend of the Reliance Industries-operated D6 block gas continues, gas from the Krishna-Godavari Basin would not be available to the power sector and all the projects would remain stranded leading to a major power crisis in the State, the Minister said.

In April, the State Government had drawn the attention of the Power and Petroleum Ministries and, in May, requested the Prime Minister to instruct the concerned not to treat the Ratnagiri Power Plant on a par with the fertiliser sector. The State also did not want additional gas supplies to be made to Ratnagiri from D6.

Yet, this month, the Ratnagiri project was allocated 7.6 mmscmd according to priority equivalent to the fertiliser sector, based on the EGoM decision of 2008. The decision was based on estimates that D6 would produce 40 mmscmd gas by March 2009.

The Andhra Pradesh Government also wanted the Ministry and the Centre to supply 75 per cent requirement of gas to it, according to the EGoM’s decision.

The State has 32 lakh pump-sets, the highest in the country.

The cumulative power supply-demand gap during April-June in the State was around 3,009 million units, whereas the gap in Maharashtra for the period was 1,312 million units, the State Government said.

(With inputs from Hyderabad)


(This article was published in the Business Line print edition dated August 8, 2012)
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