Natural gas produced from C-Series fields is sold to GAIL which further markets it to end users.
The government is planning to rationalise multiple prices of natural gas in the country to make fuel costs uniform for all consumers, Oil Secretary S Sundareshan said on Wednesday.
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.
Allegations against Sibal include approving Reliance Industries' four-fold increase in capital expenditure to $8.8 billion for the nation's largest gas field KG-D6 in return of personal benefits.
The petroleum ministry has sought expansion of the legal team that is to argue the government's stand on the gas dispute between the Ambani brothers before the Supreme Court beginning next week.
An Anil Ambani group company has asked the oil ministry to stop Reliance Industries Ltd from charging marketing margin on gas, alleging that the Mukesh Ambani-led firm was not sharing the revenue and 'diverting' crores (billion) of rupees of the government's share.
The finance ministry has offered less than half of the Rs 31,700 crore (Rs 317 billion) sought by the oil ministry to make up for revenue losses incurred by the state-owned retailers on sale of LPG and kerosene. Petroleum Minister Murli Deora on Thursday met Finance Minister Pranab Mukherjee to seek compensation for the public sector oil firms for their losses but the meeting remained inconclusive.
The government plans to more than double the price of natural gas produced by Oil and Natural Gas Corp (ONGC) to $4.20 per mmBtu, in a move that will help the state-run firm break even in gas business.
Domestic fuel sales at 11.39 million tons in February were 0.2 per cent lower than 11.41 million tons of petroleum products consumption in the same month a year ago.
Deora is believed to have explained the oil ministry's position on gas pricing and utilisation.
Anil dared the oil ministry to cancel the production sharing contract with RIL if it was really aggrieved and not challenge third party agreements.
Oil Minister M Veerappa Moily approved continuation of the existing rate of $4.2 per million British thermal units until the new government, which will be in place in May, decides on implementation of the new price formula.
The government may in 'weeks' decide on raising price of natural gas produced by state-owned ONGC and Oil India by 30 per cent, petroleum secretary S Sundareshan said on Monday.
An RIL spokesperson said that the company has filed its reply to the government's petition on the gas dispute.
The government may for the first time in about five years raise price of natural gas produced by state-owned firms like Oil and Natural Gas Corporation after the finance ministry and the Planning Commission backed the proposal for a 30 per cent hike.
The Power Ministry is believed to have instructed state-run NTPC to sign a gas supply deal with Mukesh Ambani-led RIL to lift government allotted quota, while favouring that marketing margins be decided by the Oil Ministry instead of the supplier.
The Union oil ministry is considering a proposal to adopt differential pricing for diesel, under which industrial users like power utilities, will be charged market prices and retail consumers continue to be subsidised.
Industrialist Anil Ambani on Wednesday met key ministers and senior government officials in New delhi, a day after he accused the Union oil ministry of helping the Mukesh Ambani-run RIL renege its commitment on supplying gas to his group firm.
While jet fuel price was increased by Rs 2, subsidised LPG price has been hiked by Rs 4.50 per 14.2-kg cylinder. Non-subsidised LPG to cost Rs 93 more.
The government on Wednesday more than doubled the price of natural gas produced by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd to $4.20 per mmBtu, at par with the rate at which Reliance sells its gas.
The Petroleum Federation of India, the apex body of public and private oil firms, has submitted to the oil ministry a 100-day agenda for the new government. On top of its list is decontrol of petrol and diesel prices. Currently, public sector retailers sell auto fuel at government-dictated rates, which the private sector competition is unable to match in times of high input cost (crude oil prices).
Delhi Police on Thursday arrested 2 more persons in connection with the corporate espionage case.
Cairn's contractual term for exploring and producing oil from the Rajasthan Block RJ-ON-90/2 expires in 2020 and the area is to return to the block licensee, ONGC.
After a series of flip-flops, NTPC is likely to finally sign an agreement with Reliance Industries this week to buy government-allotted natural gas at officially approved price of $4.20 per mmBtu.
Oil ministry had previously proposed a 30 per cent hike in price of gas produced by Oil and Natural Gas Corporation and Oil India Ltd to $2.3 per mmBtu but finance ministry wants these rates to be brought on par with RIL, sources in the know of the development said.
On July 27, power ministry had written to the oil ministry saying 'the marketing margin being charged by RIL is not in line with the decisions of an empowered group of ministers on pricing formula (for KG-D6 gas)'. While Anil Ambani Group firm RNRL on Sunday alleged that RIL was charging 'unauthorised' marketing margin, 35 firms buying KG-D6 gas are paying the $0.135 per mmBtu to RIL without protest.
The oil ministry is believed to have turned down Reliance Petroleum Ltd's request to export LPG from its newly commissioned refinery at Jamnagar in Gujarat, forcing the only-for-exports unit to sell the cooking fuel locally.
Faced with the prospect of revenue loss on fuel jumping to Rs 700 billion (Rs 70,000 crore) next fiscal, Petroleum Ministry on Wednesday called for "harsh decisions" even as it hinted that cleaner Euro-IV fuel in 13 metro cities will cost more from April 1.
Reliance Industries has written to the government that it has no objection to the Comptroller and Auditor General of India auditing its gas field costs and said it is operating the field in compliance with rules.
Given the incredibly high stakes involved, the Comptroller and Auditor General and Central Vigilance Commission should examine relevant facts and find out if capex was overstated, Anil said, pointing that budgeted expenditure of RIL for peak production of 40 mmscmd was only Rs 12,000 crore (Rs 120 billion) in 2004.
The Oil and Natural Gas Corporation will pay Rs 852 crore (Rs 8.52 billion) for subsidising petrol and diesel during January-March quarter but state gas utility GAIL India has been spared from the subsidy burden.
Reliance Industries and Essar Oil are keen on buying crude oil from Cairn India's Rajasthan fields even as the petroleum ministry struggles to find takers of the nation's most prolific oil discovery among public sector firms.
The decision comes after Australian mining major BHP Billiton said it would not improve the terms of its bid. BHP Billiton, the largest mining company in the world, and new entrant GVK Oil and Gas were the sole bidders for five deepwater blocks and hence the provisional winners after the bidding closed on June 30 this year.
As crude oil prices hover around four-year lows, the government may look at slashing diesel prices further that will help cool inflation by lowering goods transportation charges.
With international crude oil prices dipping to last year's levels, the government has put the issue of cutting motor and cooking fuel prices back on the agenda to tame inflation, two senior oil ministry officials have said.
Oil ministry officials say it is unlikely that the government will accept the BK Chaturvedi Committee's recommendation for raising the retail prices of petrol and diesel as it faces general elections in less than a year. The move also risks putting pressure on inflation, which has already crossed a 13-year high.
Days after the Cabinet approved doubling of natural gas price from April next year, the Finance Ministry has written to Oil Ministry suggesting setting of a ceiling or an upper limit for the rates.
Labayendu Mansingh, Chairman of the Petroleum and Natural Gas Regulatory Board, is an amicable yet tough man. In his 5 months as the petroleum & natural gas regulator, Mansingh announced to the oil & gas industry his intention of proving that the regulatory board is more than a toothless tiger. The board will come out with its first set of regulations, which will lay down rules for the distribution of gas to households, vehicles & industries in cities by middle of this month.
CAG had in its previous reports slammed Oil Ministry and its technical arm DGH for not exercising enough control and vigil over KG-D6 block.
As per the 15-day billing cycle, gas producers are to raise the first invoice at the revised price of $5.61 per million British thermal unit this weekend.
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