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Gas at market prices for fertliser and power units

Written by: Staff
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New Delhi, May 3 (UNI) Fertiliser and power plants may soon have to procure gas either from the private sector or through imports as the government may not be able to keep up the current arrangement of allocating gas to them at Administered Price Mechanism (APM) prices from the ageing gas fields of ONGC and OIL for long.

Under the gas pricing order of June 2005, the total APM gas produced by ONGC and OIL from their exisiting nomination blocks is supplied to the power and fertiliser sectors, court-mandated consumers and small consumers having allocation upto 0.05 Million Cubic Meters of Gas Per Day (MMSCD).

The total APM gas at present is about 53 MMSCD and out of this, 20 MMSCD is being supplied to the fertliser units.

Official sources pointed out that this APM gas was coming from gas fields which are in the declining phase.

According to them, in future, additional gas supplies will be from Production Sharing Contract (PSC) or New Exploration Licensing Policy (NELP) blocks and imports---in both the cases---at market related prices. Also, it would not be possible for the government to make gas allocations for any particular sector.

While in the case of gas imports by the Public Sector Undertakings (PSUs), the Ministry of Petroleum and Natural Gas could still impress upon them to give preference to the fertiliser units, subject to the condition that such units accept the market prices, for gas produced by joint ventures and the private sector under PSC/NELP, the fertiliser units will need to directly tie-up their requirements with the gas producers or marketers, they pointed out.

As far as the supply of liquid fuel, such as naphtha, Furnance Oil (FO) and Low Sulphur Heavy Stock (LSHS) is concerned, these could be procured by the urea units from the Oil Marketing Companies (OMCs) at market determined prices or imported directly, they said.

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