News Release Details
Gas to fertilizer, power 3 units may cost 12% more
New Delhi 27-Sep-2007
The petroleum ministry has proposed a 2.5 percent increase in the price of natural gas sold by state-run Oil and Natural Gas Corporation (ONGQ to power and fertilizer units.The ministry has prepared a Cabinet note for raising the price of gas produced by ONGC to Rs 3.6 per cubic metre from Rs 3.2 per cubic metre, Petroleum Secretary MS Srinivasan said. "We will circulate the note soon and expect a decision a month's time," he said. The Cabinet had, in June 2006, raised ONGC gas price from Rs 2.85 to Rs 3.2 per cubic metre on an interim basis and asked the Tariff Commission to go into wellhead price of gas. The Tariff Commission recommended raising ONGC gas price to Rs 3.6 per cubic metre while that for Oil India, it recommended Rs 4 per cubic metre. Gas from ONGC and OIL fields is sold at a government-fixed rate, which is much lower than the prices charged by private companies such as Reliance.Srinivasan said since the cost of production of gas from the North-East is higher, the price of gas for the company has also been recommended higher. ONGC produces 47^8 million standard cubic meters per day of gas that is sold at government-dictated rates while OIL sells 7-8 mmscmd on admitstered prices.Together with 10 per cent royalty, the new price of ONGC gas would translate into a consumer price of Rs 3.9 per cubic metre. The current price of Rs 3.2 per cubic metre (1.97 dollars per mBtu) is also excluding royalty. The government earlier this month set 4.2 dollars per mBtu price for 34-35 mmscmd of gas to be produced by Reliance Industries from its eastern offshore KG-D6 block, that the company had won in the first round of auction under the NELP in 2000.
New Delhi 27-Sep-2007
The petroleum ministry has proposed a 2.5 percent increase in the price of natural gas sold by state-run Oil and Natural Gas Corporation (ONGQ to power and fertilizer units.The ministry has prepared a Cabinet note for raising the price of gas produced by ONGC to Rs 3.6 per cubic metre from Rs 3.2 per cubic metre, Petroleum Secretary MS Srinivasan said. "We will circulate the note soon and expect a decision a month's time," he said. The Cabinet had, in June 2006, raised ONGC gas price from Rs 2.85 to Rs 3.2 per cubic metre on an interim basis and asked the Tariff Commission to go into wellhead price of gas. The Tariff Commission recommended raising ONGC gas price to Rs 3.6 per cubic metre while that for Oil India, it recommended Rs 4 per cubic metre. Gas from ONGC and OIL fields is sold at a government-fixed rate, which is much lower than the prices charged by private companies such as Reliance.Srinivasan said since the cost of production of gas from the North-East is higher, the price of gas for the company has also been recommended higher. ONGC produces 47^8 million standard cubic meters per day of gas that is sold at government-dictated rates while OIL sells 7-8 mmscmd on admitstered prices.Together with 10 per cent royalty, the new price of ONGC gas would translate into a consumer price of Rs 3.9 per cubic metre. The current price of Rs 3.2 per cubic metre (1.97 dollars per mBtu) is also excluding royalty. The government earlier this month set 4.2 dollars per mBtu price for 34-35 mmscmd of gas to be produced by Reliance Industries from its eastern offshore KG-D6 block, that the company had won in the first round of auction under the NELP in 2000.