EGoM to decide on gas re-prioritisation tomorrow

An Empowered Group of Ministers (EGoM) led by defence minister A K Antony would look into the plan to shelve priority ranking in natural gas allocation and also re-allocation of the gas for urea facilities to power sector. 

As per the current procedure, priority ranking is given in the pecking order of first existing gas-based urea plants, LPG units, power plants lying idle, city gas distribution projects and if remains for existing gas based power plants.  According to fertilizer industry a reallocation and abolition of priority ranking may add another Rs 6,000 crore to the urea subsidy. 

About 25 power plants were running short of gas due to the decline in production to 15 mmscmd in KG-D6 from 61 mmscmd in 2010. The allocation for these power plants from KG-D6 were supposed to be around 29.7 mmscmd, which turned to zero supply for the sector now.

The fertilizer industry expects urea subsidy to increase by another Rs 21,000 crore from the next financial year owing to an expected cut on allocation, coupling with an increase in domestic natural gas prices and also the depreciation in rupee.