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State-owned natural gas producers – ONGC and Oil India – have been allowed to sell new supplies from their small and isolated field through open bidding. Till now the companies were allowed to sell only additional gas available after providing for existing customers through open bidding.
But, effective April 1, the Ministry has notified that “In case of new supplies, the price will be determined by national oil companies by calling bids through an open competitive bidding process.” The Government had priced gas at $4.66/mmBtu (gross calorific value) for a six-month period beginning April 1, 2015.
Now, with this notification, the companies can ask interested buyers to bid at the prevailing gas price determined by the Centre. The small and isolated fields are those whose peak production is less than 0.1 million standard cubic metres a day and are situated at least 10 km away from the gas grid.
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