Reliance gas may cost more

An Empowered Group of Ministers had, in September 2007, approved a price of $4.20 per mbtu based on bids from 10 power and fertiliser users for less than half of the planned production from KG-D6, but it had not specified if the same shall be the price for all consumers and for all the output.

Petroleum Ministry has now sought an opinion from upstream regulator DGH if the same price should apply to other consumers like petrochemical industry that can pay a higher price thereby getting Government higher revenues.

"Just as a price discovered only through those sectors which have a higher capacity to pay (high end customers) would be inappropriate to enforce commonly to all the sectors, even the vice versa would not be appropriate," the ministry wrote to DGH on May 9.

RIL plans to produce 80 mmscmd gas from KG-D6 beginning with about half of this from the third quarter this year, but it has not been able to finalise gas sales agreements with the 10 bidders due to a Bombay High Court stay.

Anil Ambani Group firm RNRL and state-run NTPC, which are claimants to the other half of KG-D6 production, may not be able to lift the gas immediately, making this additional gas available for sale through price discovery, the ministry said.

"Since the start of production from KG-D6 block cannot be delayed, these issues are to be put up in the next meeting of the EGOM," it said, seeking to know if price for other buyers should be decided by a bid process.