While the government had in June approved a new formula for pricing of all domestically produced natural gas, the Cabinet yesterday allowed the same principles to also be applied to Reliance Industries' currently producing fields in KG-D6 block subject to certain conditions.
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The Management Committee headed by Director General of Hydrocarbons R N Choubey refused to take a view on appointment of renowned reservoir consultants Ryder Scott, DeGolyer and MacNaughton, Gaffney, Cline & Associates or Netherland, Sewell & Associates to ascertain if RIL's claims of fall in reserves are actually true or the firm was hoarding gas by producing less, official sources said.
The Oil Ministry is seeking Cabinet nod to allow Reliance Industries to retain three gas discoveries worth $1.45 billion in the eastern offshore KG-D6 block even after expiry of timelines.
Amidst Finance Ministry raising prospects of forcing Reliance Industries to sell gas at old price of $4.2, Oil Minister M Veerapa Moily on Thursday said there was no rethinking in the government on the decision to double gas rates from April 1, 2014.
The report, 'Road Ahead Clears Up for Oil PSUs', says the decline in underrecoveries, or losses oil-marketing companies incur on selling petroleum products below market price, will have a significant positive impact on both upstream and downstream public-sector oil companies.
Reason behind for the change in his stance: gas price increase.
FIXES BY THE GOVERNMENT: Energy price fixed, tax issues linger.
While lower gas output led to earnings cuts, price rises with regular ramp-ups in output will lead to earnings upgrades
The committee said whatever benefit RIL received in terms of the migrated gas is liable to be returned to the government.
Moving from pricing control to a free market means stiff competition.
ONGC's chairman and managing director Sudhir Vasudeva tells Business Standard that any price for natural gas that is more than $4.2 a unit is good for the company.
Gas pricing guidelines stipulate that a new gas price will apply to all producers except RIL.
Studies suggest net benefits of hydro-power, nuclear energy or natural gas as sources of electricity are greater than those of wind and solar.
The Cabinet on Thursday decided to allow Reliance Industries to almost double the price of natural gas from April provided the firm gave a bank guarantee to cover its liability if gas-hoarding charges are proved.
The commission asks for notification to be deferred; RIL's KG-D6 pricing issue may return to Cabinet
A day after deciding to nearly double natural gas prices to $8, Finance Minister P Chidambaram on Friday hinted that power and fertiliser units may get gas at subsidised rates to keep electricity and urea costs down.
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