Govt approves RIL's gas price at $4.2 per mBtu
The decision of the EGoM will lead to a gas price of Rs 172.20 per mBtu at delivery point at the prevailing Indian rupee-US dollar exchange rate.
By PTI |
NEW DELHI: The government on Wednesday approved Reliance Industries' gas pricing formula after tweaking it to lower the fuel price by 8 per cent, ending months of uncertainty over the issue and paving the way for the next round of auctioning oil and gas blocks.
The Empowered Group of Ministers headed by External Affairs Minister Pranab Mukherjee excluded exchange rate fluctuations from the formula and lowered the ceiling of the 25 to $65 a barrel price band to $60 a barrel.
"The above decision of the EGoM will lead to a gas price of $4.20 per mBtu at delivery point which translates into a price of Rs 172.20 per mBtu at the prevailing Indian rupee-US dollar exchange rate," an official release said.
Reliance had proposed to price gas at $4.33 per mBtu or Rs 187.84 per mBtu.
"The EGoM decided that the price basis/formula submitted by Reliance Industries and its partner Niko Resources, may be accepted with modifications as per the recommendations of the Prime Minister's Economic Advisory Council (EAC), including denomination of the entire formula in US dollars," it said.
For all fields awarded in six rounds since 2000, the natural gas price calculation would be pegged at a constant of 2.50 dollars per mBtu.
"This will pave way for launch of NELP-VII," Petroleum Minister Murli Deora said. The Centre had put-off the bidding round for exploration acreage fearing backlash from foreign investors over pressures being built on the government to renege on its commitment to give market price.
The EGoM closed arguments on the issue with unanimity that government's commitment of giving market determined prices to companies investing in the nation's oil and gas hunt should not be tempered with.
The Empowered Group of Ministers headed by External Affairs Minister Pranab Mukherjee excluded exchange rate fluctuations from the formula and lowered the ceiling of the 25 to $65 a barrel price band to $60 a barrel.
"The above decision of the EGoM will lead to a gas price of $4.20 per mBtu at delivery point which translates into a price of Rs 172.20 per mBtu at the prevailing Indian rupee-US dollar exchange rate," an official release said.
Reliance had proposed to price gas at $4.33 per mBtu or Rs 187.84 per mBtu.
"The EGoM decided that the price basis/formula submitted by Reliance Industries and its partner Niko Resources, may be accepted with modifications as per the recommendations of the Prime Minister's Economic Advisory Council (EAC), including denomination of the entire formula in US dollars," it said.
For all fields awarded in six rounds since 2000, the natural gas price calculation would be pegged at a constant of 2.50 dollars per mBtu.
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"This will pave way for launch of NELP-VII," Petroleum Minister Murli Deora said. The Centre had put-off the bidding round for exploration acreage fearing backlash from foreign investors over pressures being built on the government to renege on its commitment to give market price.
The EGoM closed arguments on the issue with unanimity that government's commitment of giving market determined prices to companies investing in the nation's oil and gas hunt should not be tempered with.
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