GAIL India has petitioned the petroleum ministry against the demand made by the BG group, ONGC and Reliance for a higher price of natural gas produced at the Panna/Mukta and Tapti fields in offshore Mumbai.As per the production sharing contract (PSC) for the Panna/Mukta and Tapti oil and gas fields, jointly operated by BG-ONGC-RIL, the upper ceiling of gas price can be raised to $5.6 per million British thermal unit (MBTU) from the current $3.11 per MBTU after seven years of production.BG-ONGC-RIL have now invoked the provision, and are seeking up to $4 per MBTU from GAIL, which buys about 11 million standard cubic metres of gas per day produced at the fields."The Panna-Mukta-Tapti joint venture is not agreeing to the price offered by GAIL for continuing the purchase of gas from these fields. GAIL has been making a case for charging a reasonable price based on market affordability," the PSU said in a press release.With GAIL not willing to pay anything more than the current price of $3.11 per MBTU, the BG-ONGC-RIL combine have proposed to sell gas to other markets."This proposal of the JV partners would deprive power and fertiliser plants set up along the HBJ of the scarce commodity," GAIL said, adding the diversion of gas would reduce gas-based power generation by over 2000 MW or cut domestic fertiliser production by over 5.5 million tonne per annum.BG-ONGC-RIL, on the other hand, said an increase in gas price was necessary to generate resources ($750 million) needed for boosting the output from the Panna/Mukta and Tapti fields.
