ONGC, OIL to more than double natural gas price
03 Jun 2010
The government today granted state-run oil companies ONGC and OIL freedom to price any additional natural gas produced from blocks given to them on nomination basis at market rates.
The union cabinet today approved a revision of the administered price mechanism (APM) price of natural gas from the present level of Rs3,200 per thousand cubic metres ($1.79 per million British thermal units) to Rs6,818 per thousand cubic metres ($3.818 per mmBtu).
For customers in the North-East, 40 per cent of the price would be provided as subsidy by government.
The price of natural gas produced by state-run Oil & Natural Gas Corporation Ltd (ONGC) and OIL India Ltd (OIL) from their nomination blocks is currently sold at APM price.
The APM price was last revised in 2005.
The fields of ONGC and OIL are mature and ageing. Hence, substantial expenditure is necessary to maintain their gas production. Further, the cost of equipment has increased manifold in the last few years, a government release said.