Comments
The Cabinet Committee on Economic Affairs on Friday deferred a decision on domestically produced natural gas pricing.
Finance Minister P. Chidambaram told newspersons after the CCEA meeting that “the paper (agenda) was there. But, the Minister for Petroleum & Natural Gas, M. Veerappa Moily had to go to Agartala. Hopefully, we would like to take a decision next week when the Minister is back.”
Moily was in Tripura for the inauguration of ONGC’s power plant by President Pranab Mukherjee.
What is amusing is the fact that the issue of gas pricing was pushed as part of additional items to be considered by the CCEA on June 20, at the behest of the Petroleum Ministry.
On June 19, the Petroleum Ministry had circulated the CCEA note for considering fixation of domestically produced natural gas based price on the recommendations of the C. Rangarajan Committee on Production Sharing Mechanism in the Petroleum Industry.
The Ministry was seeking approval for Domestic Natural Gas Pricing Guidelines 2013.
Business Line had reported that though the matter was listed in the agenda of the CCEA meeting, there was uncertainty about the issue being taken up, as the Minister was not in town. Besides the Power Ministry, a major consumer, continues to oppose the proposed domestically produced gas price of $6.77/mmBtu by Petroleum Ministry.
The Power Ministry feels that any price beyond $5/mmBtu was unviable for the sector. The Fertiliser Ministry had also expressed its reservations.
The pricing was to be applicable to gas produced from all sources, conventional as well as unconventional like shale, CBM etc.
The guidelines were to be applicable from April 1, 2014, with exception to gas for which prices have been fixed contractually for a specific period.
An example of such a contract is Reliance Industries operated KG-D6 block. The new price for D6 block will come into effect from April 1, 2014.
These guidelines are also not applicable where the contract provides for specific formula for natural price indexation/fixation. An example of this is price for gas being produced from Panna-Mukta-Tapti fields. But, eventually everyone will have to follow the price policy, an industry source said.
Besides, the proposed price will be uniformly applicable to all consumers.
The Petroleum Ministry, which has suggested quarterly review of gas pricing, has suggested that the price should be notified in advance on a quarterly basis using the data for four quarters, with a lag of one quarter.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.