New Delhi, June 20 (ANI): A suggestion for across-the-board hike in natural gas prices will go before the Cabinet on Friday, after key Ministries of Finance and Fertiliser have certified the plan to raise the rates by 60 percent.
hile the Oil Ministry moved a note for raising gas prices to USD 6.775 per million British thermal unit for consideration of the Cabinet Committee on Economic Affairs (CCEA), the proposal had been listed for consideration of the CCEA meet slated for Friday morning.
However, Oil Minister M Veerappa Moily is travelling to Tripura for the inauguration of ONGC's power plant.
The Ministries of Finance, Power and Fertiliser have sent their comments on a revised note floated by Oil Ministry for pricing natural gas, as per the formula suggested by Prime Minister's economic advisor C Rangarajan-headed panel.
The panel had suggested pricing domestic gas at an average of rates at three key international hubs - US Henry Hub, National Balancing Point of UK and well-head prices of supplies into Japan, and the actual cost at which India imports liquid gas (LNG).
Sources said the price as per the formula in the current quarter comes to USD 6.775 per million British thermal unit as against the current rate of USD 4.2 per mmBtu.
Ministry of Finance wanted some changes in the pricing methodology by excluding international hub rates and pricing domestic gas at rate equivalent at the actual cost of LNG to India on a long-term contract.
The gas price, if the Finance Ministry's suggestions are accepted, would come to USD 6.79 in the immediate future and USD 8.93 by the end of current fiscal. It would rise to USD 10.29 in 2014-15 and USD 10.92 in the subsequent year.rice of gas as per Oil Ministry proposal formula would be close to USD 12 in 2014-15 and USD 14 in the next year.
The Power Ministry, sources said, pitched for a gas price of no more than USD 5 and no change in rates of gas produced by state-owned firms like ONGC, called APM gas.
Oil Ministry has rejected the suggestion of no change in APM price saying producers need to be incentivised to raise output. (ANI)