In a big boost to Oil and Natural Gas Corp (ONGC), the government has approved up to 25 per higher price for natural gas the state-owned firm may produce from new fields.
The oil ministry on June 28 issued guidelines for the price national oil companies like ONGC can charge for natural gas they produce from new fields in the blocks given to them on nomination basis, official sources said.
ONGC will get $5.25 per million British thermal unit (MmBtu) for the gas it produces for new fields in nominated blocks in the western offshore and $5 per mmBtu for fields in Cauvery basin. It will get $4.75 per MmBtu for fields in Krishna Godavari basin off the Andhra Pradesh coast. The price approved is more than $3.818 per MmBtu that the government had set for the gas ONGC produces from its operational fields in the blocks given to it on nomination basis. The price for consumers of this gas, known as APM (administered price mechanism) or government administered gas, after including royalty is $4.2 per MmBtu, sources said.
“National oil companies would charge non-APM price for gas produced from new fields in nominated blocks,” the oil ministry order of June 28 said.
The ministry based the price on the rates at which dominant players in the region like the Panna/Mukta and Tapti fields in western offshore and Reliance Industries’ KG-D6 fields in eastern offshore sell the fuel.