The government may soon hike prices of natural gas produced by state-owned Oil and Natural Gas
Corporation (ONGC) and Oil India Ltd (OIL) by as much as 30 per cent, petroleum secretary S Sundareshan said today.
''I am told by the petroleum minister that the issue is in the final stages of decision making in the government. We expect a decision soon," he told reporters on the sidelines of the 6th Asia Gas Partnership Summit in New Delhi.
The government last revised the price of gas produced by ONGC and OIL from fields given to them on nomination basis in 2005.
Current rates of $1.79 per million British thermal unit (mmBtu) or Rs3,200 per thousand cubic metres, are less than half of the $4.2 per mmBtu price of gas from KG-D6 field of Reliance Industries.
The oil ministry has circulated a Cabinet note for hiking price of gas under administered pricing mechanism (APM) to Rs4,142 per thousand cubic meters ($2.32 per mmBtu).
Under that proposal the ministry seeks to increase the price of gas under APM to Rs7,500 per thousand cubic meters or $4.2 per million British thermal unit by 2013.
Sundareshan said the government was weighing policy options to end differential pricing of natural gas that ranges from under $1 per mmBtu (APM gas) to $5.73 per mmBtu (for gas produced by BG Group-operated Panna/Mukta and Tapti fields).
In order to meet its rising energy consumption, Qatar has agreed to supply India an additional four million tonnes of liquefied natural gas a year by 2014, Sundareshan told newspersons in New Delhi on Saturday (See: Qatar to sell India 4 million tonnes more gas, but price remains an issue).
Because of the current pricing scheme, the oil marketing companies are losing over Rs5 on every litre of petrol, over Rs3 on diesel, Rs16 on a litre of kerosene and over Rs260 per LPG cylinder.