New oil minister avoids talk on gas price hike

Dharmendra Pradhan, who took charge of the ministry of petroleum and natural gas as a minister of state with independent charge, opted not to comment on pending issues like hike in the price of domestically-produced natural gas, a raging issue that has been bedeviling the ministry under the UPA dispensation.

He did not indicate any immediate announcement on the pending issue of notification of new prices for domestically produced natural gas. Instead, the newly appointed minister said India can become an economic power if it became self-sufficient in energy.

"I will now be speaking to our officials to understand the issues and challenges before the ministry," Pradhan said.

The earlier UPA government headed by Prime Minister Manmohan Singh had approved a new price for natural gas, which had to be deferred because of the EC notification of the elections to the Lok Sabha.

The revision of gas prices fixed under the government's production sharing contract with private exploration companies in 2007 became due after 2012. The government, accordingly, fixed the new gas price at $8.2 per mmBtu against the existing $4.205 per mmBtu.

This, however, was held up over a dispute over the production levels that have been falling continuously at the Reliance Industry-operated Krishna-Godavari Basin (KG-D6), which started in 2009 and price revision was due in 2014.

The output started in April 2009, and thus the 2007 pricing formula expired in March 2014.

However, the new pricing formula recommended by a panel headed by chairman of the prime minister's economic advisory council, C Rangarajan, was not extended to RIL's KG-D6 gas because of the dispute over production and investments.

Pradhan, a Rajya Sabha member from Bihar, however, was determined on the issue of stepping up the country`s oil and gas production.

"India has lots of capacity and can become an economic power if it becomes self sufficient in energy," he said.