Insta News Petroleum Ministry seeks EC approval for new gas price regime The Petroleum and Natural Gas Ministry is awaiting nod from the Election Commission for a formal approval to go ahead with notifying the new gas price regime, which will almost double the cost of natural gas to $8 to 8.5 per mBtu from the present $4.2 per mBtu from April 1. The Petroleum Secretary, Saurabh Chandra met the Chief Election Commissioner, V.S. Sampath last week, submitted the necessary documents on the issue and sought a formal approval of the Commission for hiking gas prices from April 1 in view of the enforcement of election code of conduct. In December last year, the Cabinet had given its nod for shifting to the new gas pricing regime under the Rangarajan Committee formula for both private and public sector. The new pricing formula would be applicable for a period of five years from April 1, 2014. The Election Commission had conveyed that it would study the proposal and then respond appropriately. The new rates will change every quarter based on 12-month average of global rates and LNG import price with a lag of one quarter. The price for April to June 2014 will be calculated based on the averages for the 12 months ended 31 December 2013 and it is expected that the rate in April will be around $8 per mBtu. Officials said after the price announcement, the bank guarantee that RIL would have to give will also be indicated. The Cabinet had also allowed Reliance Industries Limited (RIL) to almost double the price of natural gas from April 2014 provided the firm gave a bank guarantee to cover its liability if gas-hoarding charges are proved. The bank guarantee, which will be equivalent to the incremental revenue that RIL will get from the new gas price, will be encashed if it is proved that the company hoarded gas or deliberately suppressed production at the D1 and D3 fields in the Eastern offshore KG-D6 block since 2010-11.
Posted on: Wed, 19 Mar 2014 13:55:00 +0000
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