The Hindu : Front Page : ‘Centre has no role in fixing gas price’

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Tuesday, Jul 03, 2007
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‘Centre has no role in fixing gas price’

Sujay Mehdudia

NEW DELHI: Even as Chief Minister Y.S. Rajasekhara Reddy sought intervention of Prime Minister Manmohan Singh on the issue of pricing gas from the KG Basin, the Petroleum Ministry on Monday told the Committee of Secretaries that the Government has no role in fixing prices of natural gas produced from areas auctioned under New Exploration Licensing Policy and it only approves the pricing formula.

At the second sitting of the recently constituted CoS, Petroleum Secretary M.S. Srinivasan made a detailed presentation on the gas supply scenario and the demand of the fertiliser sector.

The CoS, which began consultations on Friday, continued its discussion and decided to solicit views of Fertiliser and Power Ministries on July 5.

The Prime Minister’s Office had on May 23 conveyed that the fertiliser sector should get priority in natural gas allocation and power sector should be encouraged to rely more on coal for new capacities.

The Petroleum Ministry informed that domestic gas production will increase from 80.54 million standard cubic meters per day in 2007-08 to 119.98 mmscmd in 2008-09as Reliance Industries, GSPC and ONGC begin production from KG fields. The CoS was constituted after Power and Fertilisers Ministries strongly objected to Reliance Industries Limited determining the sale price of $4.33 per mBtu for the fuel it plans to produce from its KG-D6 block.

The issue of pricing of natural gas from the KG Basin had taken a new turn with the Chief Minister urging the Prime Minister to convene a meeting of the Energy Coordination Committee (ECC) to give an opportunity to the Chief Ministers of various States to present their views on the gas price policy.

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