New Delhi: The government is likely to raise the price of natural gas produced by ONGC and Oil India Ltd by 16% and index it to inflation rate, a move that would result in higher revenues for the two firms.
The Oil Ministry has proposed to the Cabinet raising prices of natural gas produced by ONGC from fields given to it on nomination basis, to Rs3.71 per cubic meter from current Rs3.2 per cubic meter. For OIL, the gas price has been proposed at Rs 4.15 per cubic meter.
Sources said the price would change by Rs55 per thousand cubic meter for every 10 points change in Wholesale Price Index (WPI).
Price of gas produced by ONGC and OIL from fields given to them on nomination basis, called the Administered or APM rate, were last revised in June 2005.
Sources said consumer price for power and fertilizer units outside north-east may be fixed at 10% above the producer price - Rs4.081 per cubic meter - while for the plants in NE it would be 60% of the price - Rs2.449 per cubic meter.
Consumer price for transport and small consumers outside NE may be fixed at 20% above the price for power and fertilizer sectors - Rs 4.897 per cubic meter.
The difference between consumer price and producer price outside NE would be transferred to ONGC for research and development activities for maintaining/increasing the production of gas from nominated fields, they said.
All natural gas produced from nominated gas fields (excluding for new fields) will be treated as APM gas, while the fuel produced from new fields would be allowed to be sold at market price.