Fertilizer sector on Friday sought gas supplies from Reliance Industries's KG-D6 block at no more than 5 dollars per million British thermal unit, even as the power sector nudged the government to take its share of gas in kind.
At $4.64 per mBtu, KG gas is alleged to be over-priced.
With the price of gas from its fields in the Krishna-Godavari basin expected to be higher than rivals, Reliance Industries is targeting automobiles and domestic users because power and fertiliser plants may not be able to afford it.
Justice Anoop V Mohta, delivering the final verdict in the gas supply row between RIL and Reliance Natural Resources Limited, asked the two companies to decide on a new gas price, as the rate of $2.34 per mBtu agreed in the family de-merger agreement had already been rejected by the government.
Gas pricing guidelines stipulate that a new gas price will apply to all producers except RIL.
The Prime Minister's Economic Advisory Council has approved Reliance Industries' 4.33 dollars per mBtu price of gas from KG-D6 fields, saying it was in line with industry practices.
Petroleum ministry has rejected Reliance Industries Limited's plan to sell natural gas to Anil Ambani Group firm Reliance Natural Resources Ltd at less than half the market price.
If the EC decides to put on hold a gas price revision for RIL, it would set a precedent for pricing decisions of the government and policy decisions taken but undergoing procedural delays.
Reliance Natural Resources Ltd chairman Anil Ambani is understood to have sought a review of the government's decision, rejecting the sale of natural gas by RIL to it.
BHP Billiton, the Australian consultant which carried out pre-feasibility survey of the Iran-Pakistan-India gas pipeline, has said that the 2775-km long pipeline project has sufficient safeguards to prevent any disruption in the supplies.
Electricity from Dabhol project in Maharasthra, which is being targeted to restart from July 2006, may cost over Rs 3 a unit as LNG suppliers quote twice the price of gas than the previous estimates.
Reliance Natural Resources Ltd has questioned oil ministry's right to approve the price at which a producer sells gas to customers, saying its nod was needed only for the formula or basis of pricing of gas for computing government's share.
ONGC-Reliance-BG will get additional revenue of $70 million from realising higher price for gas produced from Panna/Mukta and Tapti fields.
Oil and Natural Gas Corp on Tuesday disputed claims made by gas utility GAIL (India) Ltd of an agreement with the operators of Panna/Mukta and Tapti fields to continue selling gas beyond March 31.
State-run Gas Authority of India Ltd on Monday said the government's decision to raise natural gas prices by 12 per cent would not affect its profitability.
Besides other issues, lack of pact between India and Pakistan on the price of the gas led to the delay in the project.
India is likely to seal a LNG-for-oilfield deal with Iran this week wherein New Delhi will buy five million tonnes of liquefied natural gas from Iran in exchange of Tehran offering it a stake in an oil field.
The joint operators of the Panna/Mukta and Tapti oil and gas fields, British energy firm BG Group, Reliance Industries Ltd and Oil and Natural Gas Corporation, have hiked the price of natural gas produced from the Tapti field.
Reliance Industries Ltd (RIL) has refuted the allegation in the Supreme Court that it is deliberately reducing production of gas in KG basin in anticipation of a higher gas price and said it has taken all steps for arbitration proceedings with Centre to sort out all disputes.
While lower gas output led to earnings cuts, price rises with regular ramp-ups in output will lead to earnings upgrades
Affected firms note practical problems in getting discoms, consumers to pay for costlier supply; viability shadow on investments
Cabinet may tweak Rangarajan formula; new price may be further delayed.
The reduction in natural gas prices would mean lower raw material cost for compressed natural gas (CNG) and natural gas piped to households (PNG).
Reason behind for the change in his stance: gas price increase.
Analysts cut upstream firms' FY15 earnings estimates, while raising those for GAIL and Gujarat Gas.
Low gas prices and weakness in petchem margins lead to lower earnings estimates for GAIL.
The 30-share Sensex gained 321 points to end at 26,430 and the 50-share Nifty surged 100 points to end at 7,879.
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Following adverse media reaction to the June 27 decision of the Cabinet Committee on Economic Affairs, the finance ministry had issued an office memorandum asking the petroleum ministry to see if there was a way to make RIL clear its gas supply backlog at the existing price.
BC Tripathi, who helms India's largest natural gas marketer and transporter -- GAIL, discusses last-mile connectivity to homes with Jyoti Mukul and Shine Jacob.
Govt notification on $8.4 a unit price likely by month-end
The commission asks for notification to be deferred; RIL's KG-D6 pricing issue may return to Cabinet
According to an official close to the development, in the coming financial audit report, to be tabled in Parliament's Budget session next year, CAG will detail the slide in the government's share in petroleum sector profits due to a drop in gas production.
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.
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