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Tuesday, Aug 07, 2007
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Ministers to look into gas pricing

Sujay Mehdudia

Decision likely in a month: Deora

New Exploration Licensing Policy VI to attract $6 billion investment
RIL plans to price the gas between $4.33 per mBtu and $4.58 mBtu

NEW DELHI: In a bid to resolve the controversial gas pricing issue, Prime Minister Manmohan Singh on Monday constituted an Empowered Group of Ministers (EGoM), headed by External Affairs Minister Pranab Mukherjee. This comes in the wake of the Mukesh Ambani-led Reliance Industries Limited (RIL) seeking a free pricing regime for the gas from its eastern offshore KG Basin.

The EGoM was formed after the Prime Minister accepted the suggestion made by Petroleum and Natural Gas Minister Murli Deora, who met him on Monday morning to discuss the issue. The discussion followed the submission of a report by the Committee of Secretaries.

New licensing policy

“The issue will be taken up by the EGoM soon and a decision on this is likely to be put in place with a month,” Mr. Deora said.

He said the New Exploration Licensing Policy (NELP) VI was likely to attract an investment of $6 billion. It was felt the Government should not do anything that would disturb investments and distract the investors.

“We have made a commitment to the investors at the time of floating the NELP on certain issues, including gas pricing, and we have to honour those commitments. We have to go into the NELP VII with a firm resolve and send a positive signal to the investors who are looking very positively at India with regard to investment in oil and gas sectors,” he said.

The EGoM is likely to discuss the report of the Committee of Secretaries, headed by Cabinet Secretary K. M. Chandrasekhar and take a decision. The issue of gas pricing had also delayed the NELP VII that was expected to take effect in August — it could now be delayed by two months.

The RIL, drawing from its right under the contract for the KG-D6 block, has proposed to price the gas between $4.33 per million British thermal unit (mBtu) and $4.58 per mBtu.

The rate was opposed by Fertilizer and Power Ministries and also by the younger Ambani sibling and chairman of Reliance Energy Limited, Anil Ambani, who sought standardised norms and a proper policy on the issue.

Crude oil price rise, a concern: Chidambaram

PTI reports:

Finance Minister P. Chidambaram on Monday said the surge in international oil prices was a matter of grave concern and it was for the Petroleum Ministry to take a call on retail pricing of petroleum products.

“Yes, rising crude prices is a matter of grave concern... It is entirely for the Ministry of Petroleum to propose that (an increase in domestic fuel prices) and seek a view on this,” he said.

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