PMO refers gas pricing issue to committee of secretaries; ECC to meet on July 12
26 Jun 2007
Mumbai: The Prime Minister''s Office (PMO) has
referred the issue of pricing natural gas found off
the east coast to a committee of secretaries.
The move comes in the wake of differences the petroleum
ministry has with the power and fertiliser ministries
over the methodology adopted for arriving at the gas
price, government sources said.
While the petroleum ministry favours market-determined
price for the gas commensurate with the risk taken by
the explorer, the other two ministries want prices to
be affordable to power and fertiliser plants.
The
energy coordination committee (ECC), meanwhile, put
off a meeting to discuss pricing and allocation of natural
gas for fertilizer sector till July 12, while a committee
of secretaries has been asked to look into the issue
of pricing of the gas found off the east coast.
The committee would comprise secretaries in the ministries
of petroleum, power, fertiliser, law and finance among
others.
The move is significant in the wake of differences the
petroleum ministry has with power and fertiliser ministries
over the methodology adopted for arriving at the gas
price.
While petroleum ministry favours market-determined price
for the gas to commensurate the risk taken by the explorer,
the other two ministries want prices should be affordable
to power and fertiliser plants.
The ECC, headed by prime minister Manmohan Singh, is
likely to review natural gas scenario in the country.
The meeting is expected to consider the entire scenario,
including demand and supply of the fuel.
The petroleum ministry has projected a saving of Rs6,900
crore a year in fertilizer subsidy by using gas at market
determined rate of about $4.5 per million British thermal
unit instead of alternate fuels like naphtha that cost
more than thrice.
Sources said gas availability and pricing for power,
the other critical sector, too may have cropped up at
the ECC meeting.
State-run Oil and Natural Gas Corp, Mukesh Ambani-led
Reliance Industries and Gujarat government-owned GSPC
have found huge gas reserves off the Andhra Pradesh
and Orissa coast in Krishna-Godavari and Mahanadi basin.
RIL,
which planned to start production from its KG D6 block
from next year, is also involved in a legal tussle with
Anil Ambani group firm Reliance Natural Resources Ltd
and state-owned power generating firm NTPC Ltd over
gas pricing.
