Active Stocks
Tue Mar 19 2024 10:21:08
  1. Tata Consultancy Services share price
  2. 4,021.35 -2.98%
  1. Tata Steel share price
  2. 148.85 -0.50%
  1. NTPC share price
  2. 312.80 -1.37%
  1. HDFC Bank share price
  2. 1,441.40 -0.33%
  1. Power Grid Corporation Of India share price
  2. 263.10 -0.72%
Business News/ Home-page / PM hints at gas price hike
BackBack

PM hints at gas price hike

PM hints at gas price hike

Premium


New Dellhi: In an indication of a likely increase in the price of gas from Reliance Industries Ltd’s (RIL’s) D6 field in the Krishna-Godavari (KG) basin, Prime Minister Manmohan Singh on Friday said his government had started gas pricing policy reforms to offer an incentive to producers of natural gas.

An RIL spokesperson didn’t comment on the development. The company may respond after reading the Prime Minister’s speech, the spokesperson said.

Petroleum minister S. Jaipal Reddy, too, declined to comment. “PM made a general statement. I shouldn’t be commenting on it," he said.

Singh’s statement comes in the backdrop of RIL seeking a rise in the $4.2 (around 214 today) per million British thermal units (mmBtu) gas price from the nation’s largest gas reservoir off the eastern coast of India.

RIL is facing flak for declining gas production from the KG basin and is involved in a dispute with the petroleum ministry over the denial of $1.24 billion in costs claimed by the firm on the D6 field. The company had invested $5.69 billion in the block as of 31 March, 2011 and recovered $5.26 billion.

Abdul Rahim Hashim, president of the International Gas Union, said, “Reasonability of price depends upon which market you are in...in the US market, one wouldn’t be able to sell it at that ($4.2 mmBtu) price."

The petroleum ministry has sought attorney general Goolam E. Vahanvati’s opinion on a price revision.

In 2007, an eGoM headed by then external affairs minister Pranab Mukherjee had approved a price of $4.25 per mmBtu for a period of five years from the date of production. Gas production from the block began in April 2009.

“Oil and gas are national resources and, therefore, should be within the framework of government and regulatory oversight," Singh said.

RIL shares rose 1.02% to 744 apiece on Friday on BSE, while the benchmark Sensex closed 0.96% up at 17,361.74.

utpal.b@livemint.com

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 24 Mar 2012, 12:17 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App