Government to review natural gas prices

The government is considering a proposal to revise the prices of natural gas produced by public sector firms such as Oil and Natural Gas Corporation (ONGC) and Oil India Ltd so as to reduce their mounting losses from sale of subsidised gas.

"Yes, a proposal is under consideration," minister of state for petroleum and natural gas Jitin Prasada said in reply to a question the Lok Sabha.

ONGC, the minister said, is currently selling 97 per cent of its gas at $2 per unit, which is equivalent to sale of crude oil at $12 per barrel against its ruling price of $80 a barrel.

ONGC, the minister said, lost over Rs2,500 crore selling gas at subsidised rates in 2006 alone.

He said the Tariff Commission, which had been asked to suggest revision in natural gas prices, has already given its recommendations based on which the cabinet will decide on revising gas prices.

The minister's statement comes amidst the ongoing tussle over pricing of natural gas produced by Reliance Industries from gas fields in the Krishna-Godaveri basin off the east coast.