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Govt may hike APM gas price for non-core sectors by 10%

Govt may hike APM gas price for non-core sectors by 10%
PTI
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First Published: Sun, Sep 12 2010. 12 45 PM IST
Updated: Sun, Sep 12 2010. 12 45 PM IST
New Delhi: The government is planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertilizer by over 10% to $5.25 per million British thermal unit.
Natural gas produced by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) from fields given to them on a nomination basis is sold under the administered pricing mechanism (APM).
While the government had recently raised the price of APM gas sold to power and fertilizer units from about $1.79 to $4.20 per million British thermal unit (mmBtu), including royalty, the rate for gas sold to non-core sector industries remained at $4.75 per mmBtu, an official said.
The price ONGC will get is higher than the $4.205 per mmBtu rate set for Reliance’s eastern offshore KG-D6 fields.
“A proposal to hike the price for non-power and fertilizer consumers to $5.75 from $4.75 per mmBtu is awaiting approval at the highest level,” he said. “The nod may come any day now.”
About one-fourth of the country’s daily output of 57 million standard cubic metres of APM gas is sold to consumers in non-core sectors like steel and petrochemicals.
Prior to this, the oil ministry had issued guidelines on 28 June on the price national oil companies like ONGC can charge for natural gas they produce from new fields in blocks given to them on a nomination basis, the official said.
ONGC is to get $5.25 per mmBtu for the gas it produces from new fields in nominated blocks in the western offshore and $5 per mmBtu for fields in the Cauvery Basin. It will get $4.75 per mmBtu for fields in the KG Basin, off the Andhra Pradesh coast.
The price approved is more than $3.818 per mmBtu ($4.2 after including royalty) that the government had set for gas ONGC produces from its operational fields in blocks given to it on a nomination basis.
“National oil companies would charge a non-APM price for gas produced from new fields in nominated blocks,” the oil ministry order of 28 June said.
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First Published: Sun, Sep 12 2010. 12 45 PM IST