OilMin back to the table on gas pricing

The ministry will now have to come up with a revised Cabinet note, with fresh suggestions from other ministries

There seems to be no end to the domestic gas pricing drama, as a decision on the C Rangarajan committee’s suggestions on pricing couldget delayed further.

The petroleum and natural gas ministry will now have to come up with a revised Cabinet note, with fresh suggestions from the finance, power and fertiliser ministries. Delaying the entire procedure on pricing, the Cabinet Secretary has asked the petroleum ministry to send a new note with fresh inter-ministerial suggestions.

Although a senior official from the ministry confirmed the development, he refused to divulge further details. Earlier, the ministry was looking to take the issue before the Empowered Group of Ministers (EGoM). In May, the Cabinet Secretariat asked the petroleum ministry to approach the Cabinet Committee on Economic Affairs (CCEA), saying the EGoM, led by Defence Minister A K Antony, was supposed to look into only pricing of gas produced under the New Exploration and Licensing Policy (Nelp).

The ministry is seeking approval for a price rise for all domestic gas produced under Nelp as well as from blocks, given out prior to it. However, reports suggest the ministry had not asked for a separate inter-ministerial suggestion for the Cabinet note and had prepared the note based on the suggestions it took from various ministries for the EGoM. The EGoM was only supposed to look into allocation of gas for various sectors and not pricing.

The base price of domestic natural gas according to the Rangarajan formula was expected to go up to $8.8 per million British thermal units (mBtu) from $4.2 mmBtu now.

Several ministries such as finance, power and fertiliser had raised their voice against the recommendations on pricing by Rangarajan panel.