Cabinet clears policy offering pricing freedom for coal bed methane gas

The Cabinet Committee on Economic Affairs (CCEA) has given its approval for marketing and pricing freedom to the coal bed methane (CBM) contractors to sell the CBM at arm's length price in the domestic market. “While discovering the market price for arm’s length sales, the contractor has to ensure a fully transparent and competitive process for sale of CBM with the objective that the best possible price is realised for the gas without any restrictive commercial practices,” said a CCEA press release.

CBM contractors have also been permitted to sell the CBM to its any affiliate, in the event contractor cannot identify any buyer. Royalty and other dues to the government, however, will be payable on the basis of Petroleum Planning & Analysis Cell (PPAC) notified prices or selling prices, whichever is higher.