ONGC seeks $4 per mmBtu for gas; `not now', says government
25 September 2008
Mumbai: Oil and Natural Gas Corporation (ONGC) has demanded a minimum of $4 per million British thermal unit (mmBtu) for the gas it receives on nomination basis from the fields to make good the losses it incurs at current prices.
The government, however, said it has no plans to raise prices of gas produced by state-run ONGC and Oil India.
''No not yet,'' petroleum secretary R S Pandey said while commenting on a proposal to raise the price gas which is now under the administered price mechanism (APM).
Pandey, however, said the country would move to competitive pricing policy when supplies are augmented. Right now, he said, there is a huge gas deficit in the country and it is a supplier's market.
ONGC gets $2.11 per mmBtu for the gas produced from the fields given to it on nomination basis.
''On our total gas business, which includes gas outside the APM, we lost Rs700 crore in revenues in 2007-08. If we look at APM gas, we lost Rs900 crore,'' ONGC chairman and managing director R S Sharma said.
Sharma said the company would break even at a gas price of $3 per mmBtu, and to sustain future investment it needed a minimum price of $4 per mmBtu.