India’s petroleum minister Veerappa Moily, under severe criticism over the government’s recent decision to increase the price of gas produced in the country, has ruled out a review of the decision taken by the cabinet committee on economic affairs (CCEA). “The CCEA approved gas pricing guidelines 2013 will be applicable for all natural gas for all sectors uniformally...There is no thinking in the government for reconsidering the CCEA’s decision ,” Moily said at a press conference in New Delhi on Thursday. The government raised the price at which natural gas will be sold to producers of power, fertilizer, minerals and steel, delivering a potential boost to the revenue of gas producers including the Mukesh Ambani-led Reliance Industries Ltd (RIL) and state-run Oil and Natural Gas Corp. Ltd (ONGC). The price increase is to take effect from 1 April next year. Commenting on the $8.4 per million British thermal units (mmBtu) price being widely quoted and coming into effect for the first quarter of the next fiscal, Moily said, “I don’t know from where this price has come. As on today for the current quarter the price will be $6.83 per mBtu. I can’t predict what will it be then. It can be lower as well.” According to the earlier estimates, the price of gas could go up to $8.4 per mmBtu from $3.5-5.73 now. The price of gas produced at RIL’s deep water KG-D6 field off theeastcoast was fixed at $4.2 per mmBtu by an empowered group of ministers on 12 September 2007 till 2014. Moily’s statement comes after the finance ministry asked the oil ministry in a communication dated 4 July to examine issues such as capping the gas price and ensuring RIL delivers any shortfall it owes to customers at the old price of $4.2 per mBtu. According to news agency Reuters, these issues have been raised by various newspapers and the finance ministry asked for “appropriate” action on the same. “This is not an instruction. It can’t be taken as an opinion or a query. My ministry is fully conscious of the issues discussed in the public domain. They have sought certain information, which will be answered,” Moily said. In response to a question about whether the government would consider putting a cap on the gas prices, Moily said there is no such proposal. “The CCEA’s decision stand and the government is not considering any change,” Moily said.
Posted on: Thu, 11 Jul 2013 12:42:17 +0000
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