EGoM meeting on gas allocation called off

A meeting of the empowered group of ministers (EGoM) on gas allocation and pricing scheduled for June 9 has been called off. Finance minister Pranab Mukherjee’s office sent out a letter to various ministries cancelling the meeting today.

While the exact reason for cancellation is not known, the decision was taken on a day when the Delhi High Court was hearing a Essar Steel petition against a government order cancelling allocation of D6 gas to the company.

The Ruia-controlled company had pleaded that since gas allocations from Reliance Industries Ltd’s (RIL) were made in accordance with the EGoM’s decision, a change in policy should also have been approved by the group.

RIL gas production had fallen from a peak of 60 million standard cubic metre a day (mscmd) in March 2010, to about 50 mscmd at present.

Date not fixed for fuel EGoM meeting

The meeting of the empowered group of ministers (EGoM) on fuel has not been scheduled yet. The group, headed by Finance Minister Pranab Mukherjee, was expected to meet on June 9 and take a call on the rise in diesel, LPG and kerosene prices.

Though the Ministry of Petroleum and Natural Gas and upstream regulator Directorate General of Hydrocarbons have held several rounds of meetings with RIL to discuss the fall in production, the largest private sector petroleum company has not come back with a commitment on scaling production.

In an order dated May 18, the ministry had told steel, refinery and petrochemical units that the “priority of allocation when production of gas was going up has to be maintained even when gas production was declining, in line with the gas utilisation policy”.

The ministry had told RIL that the priority of supply has to be maintained in the order of fertiliser, LPG, power and city gas distribution. Besides these sectors, RIL is allowed to have some quantity of gas for maintaining pressure in its pipeline.

Besides Essar Steel, whose supplies have come down to one-fifth of the contracted volumes, those affected by the cuts are Welspun Maxsteel, Vikram Ispat, Indian Oil Corporation and RIL itself.