Plan panel for Integrated Energy Policy in gas pricing

The Planning Commission wants Oil Ministry to adopt the recommendations laid out in the Integrated Energy Policy (IEP), while preparing a cabinet note on the pricing of natural gas.

"Ministry of Petroleum and Natural Gas is preparing a note for the cabinet on gas pricing and it is hoped that the recommendations of the IEP will be reflected therein", said a Planning Commission paper placed before Prime Minister Manmohan Singh and other Cabinet ministers today.     

The Oil Ministry is proposing an increase in price of natural gas produced by ONGC and Oil India from fields given to them on nomination basis.     

The IEP suggests that as the shortage of natural gas was likely to continue, its price and allocation should be "independently regulated on a cost plus basis, including reasonable returns."     

ONGC says it loses Rs 600 crore annually on selling gas at government-capped price of Rs 3.2 per cubic metres. 

The paper also pointed out that the price of natural gas being charged by either PSUs like ONGC and GAIL or under NELP are not based on cost plus regime.

 As regards price of gas from Reliance Industries-operated KG Basin (D-6), gas field owned by RIL, the note said, "(they) are a mix of fixed price and variable component linked to oil prices."