ONGC for deregulated gas price

11 July 2007

New Delhi: Reliance Industries (RIL) and Oil and Natural Gas Corporation (ONGC) have asked the government''s committee of secretaries to do away with regulated (read subsidised) price of gas.

Last week power and fertiliser companies had pitched for regulated prices to the same Committee, set up by the government to take a final decision on gas prices.

RIL and ONGC recently made gas finds in the Krishna-Godavari basin.

RIL has made a strong case for a "market-determined" price of gas, and claims to have discovered a price of $ 4.33 per million British thermal unit (mBtu) through a competitive bidding process.

ONGC however has argued that there cannot be a market-determined price as there is no real gas market in the country where demand is double the supply.

IT however wanted a higher price of gas as it is making an annual loss of Rs700 crore on the gas business. This is because the company is forced to sells most of its gas at a controlled price of below $3 per million British thermal unit (mBtu).