Prress Trust of India / New Delhi Mar 10, 2010, 16:04 IST
The government is planning to rationalise multiple prices of natural gas in the country to make fuel costs uniform for all consumers, Oil Secretary S Sundareshan said today.
"The challenge before us is to rationalise pricing gas from all sources (so that they) are similarly priced," he said at the International Symposium on Fuels and Lubricants here.
The Oil Ministry is examining a uniform domestic price for natural gas, which is now sold at anywhere between $1 and $5.73 per million British thermal units, depending on the source.
At present, the government fixes the price of gas produced from blocks given on nomination to state-run Oil and Natural Gas Corp (ONGC) and Oil India (OIL), while for others it is determined in line with production sharing contracts.
Gas from fields given to ONGC and OIL on nomination basis was sold at about $1.8 per mmBtu, while in the North-east it was priced at $1-1.2 per mmBtu.
Prices range from $3.5 to 5.73 per mmBtu for gas from the blocks that were awarded before the introduction of New Exploration and Licensing Policy (NELP) in 1999, while Reliance Industries' eastern offshore KG D6 field gas is priced at $4.20 per mmBtu.
Under consideration is pooling or averaging out all prices so that all consumers get gas at the same price irrespective of the source, he said.
Also, the ministry wants to rectify the skewed distribution of gas, Sundareshan said. Currently, the northern and western parts have been beneficiaries of gas found in the country and imported, while southern and eastern parts have been left untouched.
"We want gas to be uniformly available across the country," he said. "And there is same price all over the country."
Bulk of the highly subsidised gas from ONGC goes to fertiliser and power plants. Since both are subsidised by the government, any move to increase the price (as a result of pooling) may lead to rise in government subsidies and opposition, even from the Finance Ministry.
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