Petro min seeks panel to average out gas prices

The petroleum and natural gas ministry has asked the Planning Commission to constitute a committee to suggest a mechanism to average out prices of imported and domestic gas — a move expected to make gas prices uniform for consumers.

“We have suggested to the Planning Commission that a committee be formed on pooled pricing of gas,” Petroleum Secretary S Sundareshan said here today. This was to ensure that consumers paid almost the same price for gas, irrespective of the source, he said.

Addressing the first workshop on ‘Code of Practice for Quality of Service to City Gas Consumers’, organised jointly by Ficci and the Petroleum & Natural Gas Regulatory Board (PNGRB), he said the committee would have representatives of GAIL (India) Ltd, Petronet LNG, ONGC, Petroleum and Natural Gas Regulatory Board, as well as from petroleum, power, and fertiliser ministries. Any decision on a mechanism for pooled pricing of gas was likely to be in place in a year from now, he said.

The ministry had earlier commissioned a study by Spanish consultant Mercados International on the feasibility of pooling of over a dozen different rates at which natural gas produced from different fields in the country was sold.

The price for domestic natural gas ranges from $2.71 to $5.73 per million British thermal unit (mBtu), while LNG on long-term contract is currently imported at $6.92 per mBtu and from spot market at close to $8.52 per mBtu.

Mercados has suggested separate pools for the fertiliser and power sectors and involved several complex inter-ministerial issues. Sundareshan said the ministry had requested the Planning Commission for an inter-ministerial committee, under the chairmanship of its advisor (energy), to formulate a policy for pooling of natural gas prices and devise pool operating guidelines to make the policy operational.