Q1 natural gas price $6.8 per unit by Ranga panel formula

New Delhi, July 5 (IANS) The price for natural gas in India for the April-June quarter of this year comes to $6.83 per unit, as per the government's new gas pricing policy, the petroleum ministry said Friday.

The June 28 approval by the Cabinet Committee on Economic Affairs (CCEA) of a new price for domestically produced gas was based on a formula suggested by the C. Rangarajan committee constituted by Prime Minister Manmohan Singh.

"As per the Rangarajan formula, the price will be fixed on the basis of average of netback price of Indian gas imports and also the weighted average of the price at international hubs (markets).

"On the basis of the said formula, the price for natural gas in India for the quarter April-June 2013 comes to $6.83 per MBTU (million British thermal unit)," said an oil ministry statement.

Netback price is an arrangement in which the price of gas at the well-head is based on that of the processed gas and then calculated backwards.

According to the ministry, during the circulation of its cabinet note, the Planning Commission suggested a price of $11.18 per MBTU, the finance ministry of $6.99 to $8.93 per MBTU, the Department of Fertilizer $6.68 per MBTU, while the power ministry wanted to continue with the cost-plus regime which comes to around $4.14 per MBTU.

The present price of $4.2 per MBTU was fixed in 2009 which is applicable till March 2014.

"However, the price of $4.2 $ per MBTU is not found to be viable for the sustenance of the domestic production of gas and all the operators are demanding increase in price," the statement said.

The Gujarat State Petrochemical Corporation (GSPC) has been demanding a price of $13-14 per MBTU for their blocks in KG D-6 basin in the eastern offshore. Reliance Industries Limited (RIL) has also been asking a similar price for their KG-D6 gas, the statement said.

"Even the public sector undertakings such as ONGC and Oil India Ltd have been repeatedly representing for increase in gas price as the production will not be viable at any price less than $7," the statement added.

The domestic gas production in the country has been falling drastically short of the demand and there will be huge dependence on the import of gas at much higher price of around $14 per MBTU and more, which will simply become unaffordable, the ministry said.

A major reason for weak domestic gas production is that the present price of $4.2 per MBTU has not been found viable.

According to the ministry, 3 trillion cubic feet of gas reserve in the country is waiting to be exploited.

The investment in exploration and development plan has been consistently going down, from $6 billion in 2007-08 to around $1.8 billion in 2011-12.

"At the same time, Indian companies have already invested $27 billion in the E&P (exploration and production) sector abroad and the remaining $10 billion is in pipeline," the statement said

Countering allegations that the new price would bring windfall gain to private operators, the petroleum ministry said more than 65 percent of domestic gas production is by the public sector companies and the remaining 35 percent by the private or joint venture companies.

--Indo-Asian News service

bc/dg

Matches

MORE TOP STORIES TODAY

Bangalore's arsenal blazes to victory

Bangalore's arsenal blazes to victory

Yuvraj Singh was back to his best in his first match for Royal Challengers Bangalore. More »

Time for Chennai to enter familiar cocoon

Time for Chennai to enter familiar cocoon

Chennai have been able to purchase batting replacements for the loss of Michael Hussey and spin reinforcements in the form of Samuel Badree. They appear… More »

Evenly matched Rajasthan and Hyderabad face-off

Evenly matched Rajasthan and Hyderabad face-off

A quality that defines Rajasthan and Hyderabad is consistency. Rajasthan was one among two teams to enjoy complete dominance at home last season. Hyderabad… More »

BCCI to meet before next court hearing

BCCI to meet before next court hearing

The BCCI will hold an emergent working committee meeting on April 20 to discuss the future course of action with regard to the Supreme Court hearing concerning… More »

Kallis, Narine star in Knight Riders’ crushing win

Kallis, Narine star in Knight Riders’ crushing win

An all-round display saw Knight Riders thump Mumbai Indians by 41 runs in the IPL-7 opener. More »

Gavaskar wants a clean IPL

Gavaskar wants a clean IPL

"Integrity is non-negotiable..." says the BCCI's interim chief ahead of Season 7 of the tainted league. More »

'Yak' Kallis still on top of his game

'Yak' Kallis still on top of his game

The 38-year-old South African veteran turned it on for Kolkata Knight RIders in the opening match of IPL-7. More »

Srinivasan named in fixing report: SC

Srinivasan named in fixing report: SC

The court emphasised that the tainted administrator can no longer work for the BCCI. More »

Yuvraj happy to play for RCB: Kohli

Yuvraj happy to play for RCB: Kohli

New-look RCB will play their first game of IPL-7 on Thursday. More »

Shane Watson issues moral warning

Shane Watson issues moral warning

'Everyone knows what is right and what is wrong and if you do the wrong thing it will be found out' More »

Why I'm not looking forward to the IPL

Why I'm not looking forward to the IPL

Welcome to another season of a league that many watch but few trust. More »

IPL: News Line

IPL: News Line

A round-up of all the news from this season of the IPL. More »

Johnson may quit T20s for Tests

Johnson may quit T20s for Tests

Australia's Mitchell Johnson may quit limited-overs cricket to prolong his test career with an eye on the 2015 Ashes series in England, the fast bowler… More »

Nepal players call off boycott

Nepal players call off boycott

Thaw in relations after formation of an advisory committee that would work in tandem with the Cricket Association of Nepal. More »

There's a lot going on: Fleming

There's a lot going on: Fleming

He experienced anxious moments in the lead-up to the tournament as the courts decided on whether to suspend the franchise, he said, but stressed that the… More »

Latif couldn’t work with tainted players

Latif couldn’t work with tainted players

Former Pakistan cricket captain Rashid Latif said Tuesday he turned down the job of national chief selector because he could not work with ex-players tainted… More »

We are not over-confident: Bailey

We are not over-confident: Bailey

Indian Premier League — George Bailey-led Kings XI Punjab will face Chennai Super Kings on Friday. More »

Big runs expected, with bat and ball

Big runs expected, with bat and ball

Royal Challengers Bangalore: Their main concern, once again, is the fast bowling More »

Taxing issue — BCCI hits roadblock

Taxing issue — BCCI hits roadblock

MoU between BCCI & its units to avoid double taxation delayed after a few decline to share details. More »

Black Caps pick rookie duo for West Indies

Black Caps pick rookie duo for West Indies

New Zealand selectors included two new caps in a 15-man Test squad named Tuesday to tour the West Indies, with injury-hit spinner Dan Vettori's future… More »

The stage is set for IPL-7 to start

The stage is set for IPL-7 to start

The Preview — Defending champions Mumbai Indians take on Kolkata Knight Riders More »

Srinivasan appeals to court to allow BCCI comeback

Srinivasan appeals to court to allow BCCI comeback

He was aggrieved by the allegations against him during the hearing. More »

India: cricket's Brazil

India: cricket's Brazil

They are tough to beat with a big talent base exposed to good facilities. (CYCSPL) More »

Delhi Daredevils say no to gifts

Delhi Daredevils say no to gifts

Franchises are doing their bit to refurbish the image of the tainted league. More »