The Ministry for Petroleum & Natural Gas has informed companies such as Reliance Industries Ltd, ONGC, and Oil India, that till September 30, the domestically produced gas would continue to be priced at rates prevailing as on March 31, 2014, a senior Government official said.

Meanwhile, Minister of State (Independent Charge) for Petroleum & Natural Gas Ministry Dharmendra Pradhan informed the Lok Sabha in a written reply on Monday that the Government had decided to put off the implementation of the Domestic Natural Gas Pricing Guidelines 2014, till September 30. Till such time the local gas price will continue to remain at the rates prevailing as on March 31, 2014.

Demand vs supply To another question on demand and supply of natural gas, the Minister said, according to the report of the working group on Petroleum & Natural Gas Sector (12th Plan), there was a total demand of about 371 million standard cubic metre a day (mmscmd) during 2013-14, out of which the requirement of power and fertiliser sector was 153 mmscmd and 110 mmscmd, respectively.

During the same period, supply of natural gas to power and fertiliser sectors was 29.43 mmscmd (27.26 mmscmd from domestic sources and 2.17 mmscmd imported) and 42.95 mmscmd (30.30 mmscmd was domestic gas and 12.65 mmscmd was imported).

Pradhan said the Government had taken several steps to improve the availability of gas, such as intensification of domestic exploration and production activities, development of shale gas framework, research and development of gas hydrate resources and import of liquefied natural gas.

On the cost of production of natural gas vis-à-vis the rate at which it is being sold in these sectors, the Minister said the production cost of ONGC (excluding joint ventures) during 2012-13 was $3.62 a unit (gas is measured in million British thermal units).

During the same period, under the production sharing contract regime, the average cost of production in major producing fields varied from $2.19/unit to $4.80/unit.

The current price, at which gas from various sources including coal bed methane, is being sold to the power and fertiliser sectors are $4.2/unit to $6.87/unit.

Impact on inflation On the impact of rise in prices of petroleum products on the common man, the Minister said, petrol being largely an item of final consumption, has very limited impact on inflation, while the impact of price hike in diesel is higher.

To protect the common man from the impact of fluctuations in international oil prices, the Government continues to subsidise the retail selling price of diesel, PDS kerosene, and domestic LPG.

There has been no increase in the basic price of PDS kerosene and subsidised domestic LPG since June 2011, he said adding that, “However, the State-specific surcharge, distributor commission, siding/shunting charges etc vary from time to time and are passed on to the consumers.”

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