News Release Details
Profit petroleum may fuel power, fertiliser cos
New Delhi 20-Aug-2007
The government is considering a proposal by which it would take its share, profit petroleum, in kind from all producers of natural gas in the country to fuel gas-starved power and fertiliser plants. A policy on natural gas utilisation is on the anvil to prioritise sector wise gas allocation under New Exploration Licensing Policy (Nelp) regime. The issue assumes significance in the light of the ongoing debate over gas utilisation and priority sector allocation of the fuel. Indications of the current thinking on profit petroleum were evident in the quarterly performance review of public sector gas major (Gail), when petroleum secretary MS Srinivasan said the option to take profit petroleum in kind was under connsideration. He was responding to a suggestion made by Gail (India) CMD UD Choubey who is learnt to have said the government "should take its entitled profit gas in kind under Nelp provisions and make the gas available to Gail for marketing", an official in the know said. It is learnt the government may have a gas utilisation policy soon and taking gas in kind could be a pan of that. The committee of secretaries (CoS), headed by Cabinet secretary KM Chandrasekhar has also directed the petroleum ministry to frame a national gas utilisation policy. "The utilisation policy and the pricing policy should be drawn up by the ministry of petroleum & natural gas, in consultation with main user ministries, power and fertiliser, and the Planning Commission. The policy may be finalised with the approval of CCEA (Cabinet Committee on Economic Affairs). The process may be completed in a month," the CoS report said. The option of taking profit petroleum in cash or kind is available in production-sharing contracts (PSC) signed between contractors (such as Ra, ONGC and Cairn) and the government {the petroleum ministry) under the Nelp regime. In case the government takes its share (profit gas) in kind, the same would be valued at the market-determined price. The latest report of the PM's Economic Advisory Council (EAC) also comments on the subject. "If and when gas utilisation policies regarding both conservation/efficient use of gas fields and sect oral allocations are formulated, they should not be in conflict with market price discovery envisaged under Nelp and PSCs. Even if gas is to be allocated to priority sectors, this should be done at market prices, "it said.
New Delhi 20-Aug-2007
The government is considering a proposal by which it would take its share, profit petroleum, in kind from all producers of natural gas in the country to fuel gas-starved power and fertiliser plants. A policy on natural gas utilisation is on the anvil to prioritise sector wise gas allocation under New Exploration Licensing Policy (Nelp) regime. The issue assumes significance in the light of the ongoing debate over gas utilisation and priority sector allocation of the fuel. Indications of the current thinking on profit petroleum were evident in the quarterly performance review of public sector gas major (Gail), when petroleum secretary MS Srinivasan said the option to take profit petroleum in kind was under connsideration. He was responding to a suggestion made by Gail (India) CMD UD Choubey who is learnt to have said the government "should take its entitled profit gas in kind under Nelp provisions and make the gas available to Gail for marketing", an official in the know said. It is learnt the government may have a gas utilisation policy soon and taking gas in kind could be a pan of that. The committee of secretaries (CoS), headed by Cabinet secretary KM Chandrasekhar has also directed the petroleum ministry to frame a national gas utilisation policy. "The utilisation policy and the pricing policy should be drawn up by the ministry of petroleum & natural gas, in consultation with main user ministries, power and fertiliser, and the Planning Commission. The policy may be finalised with the approval of CCEA (Cabinet Committee on Economic Affairs). The process may be completed in a month," the CoS report said. The option of taking profit petroleum in cash or kind is available in production-sharing contracts (PSC) signed between contractors (such as Ra, ONGC and Cairn) and the government {the petroleum ministry) under the Nelp regime. In case the government takes its share (profit gas) in kind, the same would be valued at the market-determined price. The latest report of the PM's Economic Advisory Council (EAC) also comments on the subject. "If and when gas utilisation policies regarding both conservation/efficient use of gas fields and sect oral allocations are formulated, they should not be in conflict with market price discovery envisaged under Nelp and PSCs. Even if gas is to be allocated to priority sectors, this should be done at market prices, "it said.