Oil sector Bill victim of ministry turf war

The government today referred the Petroleum and Gas Regulatory Bill and the proposal to raise natural gas prices to the group of ministers (GoM) in the wake of protests from various ministries.

Senior government officials said the petroleum ministry had not expected the various ministries to object to the final Cabinet note that was circulated. Two separate GoM will now look into the matter.

The proposal to raise natural gas prices was opposed by the power, fertiliser and steel ministries as it would have raised costs.

The petroleum ministry had proposed to raise natural gas prices by 12 per cent for fertiliser units to Rs 3,200 per thousand cubic meters (tcm) and by 26 per cent for power units to Rs 3,600 per tcm from the present price of Rs 2,850 per tcm.

The power ministry was of the opinion that the petroleum ministry's proposal was not in accordance with the decision of the GoM. The GoM was of the opinion that prices be raised to a maximum Rs 3,200 per tcm, an official said.

The fertilisers and chemicals ministry had made a case for selling gas at a fixed price irrespective of whether it came from a public sector player or from a joint venture with private companies. It had also proposed a prospective increase and had opposed raising the transportation charges along the HBJ pipeline.

The steel ministry had sought an increase in a phased manner and wanted uniform prices across all sectors. It was also against the petroleum ministry's proposal to do away with the gas linkage committee for allocation of supplies.