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:
  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

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