Oil ministry to pitch for gas pricing changes: govt source

NEW DELHI Wed Jan 23, 2013 8:41pm IST

A technician opens a pressure gas valve inside the Oil and Natural Gas Corp (ONGC) group gathering station on the outskirts of Ahmedabad March 2, 2012. REUTERS/Amit Dave/Files

A technician opens a pressure gas valve inside the Oil and Natural Gas Corp (ONGC) group gathering station on the outskirts of Ahmedabad March 2, 2012.

Credit: Reuters/Amit Dave/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - The oil ministry will soon recommend a revision in local gas prices, a government source said, which if accepted would bring a windfall for state-run producers - Oil and Natural Gas Crop(ONGC.NS) and Oil India(OILI.NS).

"The minister has already said that the oil ministry has accepted the recommendation of the Rangarajan Committee and we will soon send it for cabinet's consideration," an oil ministry source said, adding his ministry would not suggest the scale of any price rise.

A panel headed by C. Rangarajan, chairman of the Economic Advisory Council to the prime minister, has suggested linking local gas prices with liquefied natural gas, U.S.'s Henry Hub, the UK's National Balancing Point and Japan Customs cleared prices.

To see the committee's full report, click: here

The oil ministry is in the process of preparing a note for a ministers' meeting on gas pricing, which is on a par with the cabinet, this source said.

Any price revision will not be applicable to gas produced from Reliance Industries' (RELI.NS) operated D6 block on the east coast, where pricing has been fixed until April 2014 output has been falling.

Higher gas prices may stoke inflation and hit power and fertiliser companies which buy the bulk of the gas sold at government-fixed rates.

India in 2010 raised the base price of natural gas produced by state-firms from blocks allocated to them without competitive bidding to $4.2 per million British thermal units, the same rate for Reliance's gas.

(Reporting by Nidhi Verma; editing by Jason Neely)

FILED UNDER:

Reuters Showcase

Land Ordinance

Land Ordinance

Modi says willing to make changes in land decree  Full Article 

Sahara Woes

Sahara Woes

SEBI cancels Sahara's portfolio management licence  Full Article 

Gold Demand

Gold Demand

India gold demand muted, eyes cut in import duty  Full Article 

Coffee's Hot

Coffee's Hot

IPO could value Cafe Coffee Day at $1 billion  Full Article 

Sahara Salaries

Sahara Salaries

Some staff say Sahara has not paid salaries for months   Full Article 

DLF Fined

DLF Fined

DLF says reviewing $8.4 million SEBI penalty  Full Article 

GM Corn

GM Corn

Monsanto says GM corn trial in final stage in India  Full Article 

Rail Budget

Rail Budget

Breakingviews - India goes back to future with $137 bln rail push  Full Article | Full Coverage 

Clean Energy

Clean Energy

India says clean energy a $160 billion opportunity over five years  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage