Changes needed in PSC to help power and fertliser companies

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New Delhi, Nov 19 (UNI) A parliamentary committee today said the government must make appropriate changes in the Production Sharing Contracts (PSC) of future exploration rounds to allocate some quantity of natural gas from new finds to power and fertiliser industries.

Besides, the ''government should also consider prescribing a minimum floor price to protect its revenue in terms of profit petroleum and a ceiling price to protect the consumer interest,'' a report presented to Lok Sabha by the Standing Committee on Petroleum and Natural Gas headed by MP, Janardhana Reddy has said.

The Committee said the pricing of gas to be produced from the KG basin D-6 block is yet to be finalised.

They have expressed hope that the government would give due weightage to all stakeholders such as the producer, consumer, concerned state government etc while deciding on the pricing issue.

The Committee have noted that at present the pricing of APM gas, which comes from the fields of ONGC and OIL given to them on nomination basis is being decided by the government while pricing of gas produced from the fields under joint venture/New Exploration Licensing Policy (NELP) is being governed in terms of the provisions of Production Sharing Contracts (PSC).

The Committee has further noted that the share of APM gas, which forms about 60 per cent of the total gas available at present is likely to come down to around 15-20 per cent by 2011-12 while the production from NELP/JV fields would go up to a considerable extent.

''Thus it would be in the fitness of things to develop a suitable pricing mechanism for the gas produced from NELP/JV fields.

As per the PSC of the NELP rounds, the price of natural gas for sale to consumers is to be market-driven.

UNI

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