 "Natural gas")
The government on Friday announced a natural gas price of $7.92 per metric million British thermal unit (MMBtu) for the remainder of April, according to the new pricing formula suggested by the Kirit Parikh Committee. However, it said the final rates for consumers have been capped at $6.5 per mmBtu.
According to an order of oil ministry's petroleum planning and analysis cell, the price of natural gas for April 8-30 period has been notified as $7.92 per MMBtu going by the new formula of gas prices being pegged 10 per cent of the international price of the Indian crude basket.
However, the rates have been capped at $6.5 per MMBtu for consumers, according to the latest decision of the Union Cabinet. “For the gas produced by ONGC/OIL from their nomination fields, the price shall be subject to a ceiling of $6.5 per mmBtu,” the order said.
The government on Thursday amended the domestic pricing model of natural gas in line with the recommendations of the Kirit Parikh committee on gas pricing.
It approved a floor price of $4 per MMBtu for the next 2 years, to cover the cost of gas production by state-run firms ONGC and OIL. The ceiling price will be set at $6.5 per MMBtu. Afterwards, both the floor and ceiling prices will be increased yearly by about $0.5 per MMBtu, Petroleum Secretary Pankaj Jain said.
The move is expected to reduce by 10 per cent the prices of piped natural gas (PNG), supplied to households, and compressed natural gas (CNG), used as auto fuel and by various industries, including petrochemicals and fertilisers.
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Meanwhile, the government has decided not to tinker with the existing pricing formula for difficult fields such as KG-D6 of Reliance Industries and BP. About 83.3 per cent of the country’s natural gas is produced by ONGC and OIL, while the remaining 16.7 percent was by private companies and joint venture entities.
Change in rates
Earlier this week, the government had kept the administered prices of natural gas produced from legacy or old fields unchanged at $8.57 per mmBtu for April 1-September 31. The latest order would supersede that.
The rate for gas extracted from newer but difficult fields such as one operated by Reliance Industries and its partner BP in the KG basin have been cut marginally to $12.12 per mmBtu. This would remain the same unless mentioned otherwise, sources said.
