A committee of secretaries (CoS) will meet on July 6 to discuss pricing of natural gas to be produced from Reliance Industries' Krishna-Godavari basin (KG-D6) block off the east coast and whether the central government should take its share in cash or kind.The CoS, comprising secretaries of petroleum, power, fertilizer, expenditure and law, was to meet on July 5 for deliberating on RIL's KG-D6 block but the meeting has been rescheduled to July 6, officials said.The oil ministry at a CoS meeting on July 2 pleaded for not changing the current policy that allows firms discovering hydrocarbons to sell at market prices. The ministry has argued that attempts to regulate prices could be seen as government going back on its commitment and would dampen the forthcoming auction of oil and gas blocks (NELP-VII).It argued that a low gas price of $2.5 per million British thermal unit will reduce the government's share in gas production from KG-D6 to $1.2 billion and royalty to $1.6 billion. At $4.5, the profit share jumps to $9.6 billion and royalty to $2.9 billion, officials said.If the government's revenue kitty is large, it would be in a better position to subsidise fertilizer production.On demands of the government taking its share of output in kind, the ministry felt the quantities will vary from year to year depending on the investment made and the price and would require government to make investment in infrastructure facilities synchronous to Reliance's facilities.Officials said in the first year, of the initial gas output of 40 million standard cubic meters per day (mmscmd) the government's share will be only 0.4 mmscmd. This rises to 23 mmscmd in the fifth year.
