Government directs RIL to meet priority sector gas supplies despite output fall
23 April 2011
A substantial fall in natural gas production at Reliance Industries' KG-D6 block has prompted the government to restrict supplies of natural gas to refineries, steel firms and petrochemical companies and divert more gas supplies to priority sector users like power plants and fertiliser units.
With a 28 per cent drop in gas production at the KG-D6 block in the east cost of India, priority sector consumers are facing a pro rata reduction in supplies.
Reports said there has been a 15 per cent cut in natural gas supplies to consumers in the power and fertilizer sectors.
The government's gas utilisation policy makes it obligatory for gas producers to supply over 70 per cent of their output to fertiliser and power projects.
The government order will hit supplies to non-priority sector users such as Indian Oil Corp's refinery in Gujarat, Gail's Pata petrochemical plant, RIL's petrochemical projects in Gujarat and Maharashtra, and Essar Steel, reports quoting petroleum ministry sources said.
"RIL has been asked to restrict gas supplies to only priority sector consumers as specified by the EGoM," the Economic Times quoted a senior oil ministry officials as saying.