The Petroleum and Natural Gas Ministry last year had moved a proposal seeking raising the price of natural gas produced by ONGC from the fields given to it on a nomination basis to Rs. 3.71 from the current Rs. 3.2 a cubic metre.
The price for gas by OIL was proposed at Rs. 4.15 a cubic metre.
Mr. Pandey said the price of gas should be competitive and based on the content of energy and its environmental impact. However, he added that India being deficit in natural resources was a seller’s market and competitive pricing should not be attempted till supplies were increased to match demand.
ONGC Chairman and Managing Director R S Sharma has been seeking an immediate hike in price of gas it sells under regulated regime as it was incurring Rs 700 crore loss per year on the business.
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The price received by ONGC was highly unremunerative, he has been saying. The prices of natural gas in India were much lower than international prices and cost plus mechanism deters investment and competitiveness.
For Reliance Industries' eastern offshore D6 field, the Government has fixed USD 4.21 per mmBtu price for five years. This price is pegged at around USD 25 per barrel crude oil price, while the world-over gas producers are charging 16 per cent of prevailing oil price for the fuel.
Author: Jo Amey
