RIL, ONGC meet govt officials on gas pricing

New Delhi, July 10 (UNI) Reliance Industries (RIL) and Oil and Natural Gas Corporation (ONGC) today made detailed presentations to the Committee of Secretaries (CoS) formed to resolve the vexed issue of pricing of natural gas.

Reliance Industries Ltd (RIL) Chairman and Managing Director Mukesh Ambani, in his presentation, said the gas from its KG-D6 Block will be sold at a cheaper rate than the price of currently available fuels like naphtha and CNG and would be comparable with that of imported coal, sources said.

State-run Oil and Natural Gas Corporation (ONGC) sought a price of about 4.75 dollars per million British thermal units (mBtu) as it was making an annual loss of Rs 700 crore on sale of gas at administered prices.

ONGC said the current administered price of Rs 3.2 per cubic meter that it gets for gas produced from its own fields was not sustainable.

The hike suggested by the Tariff Commission to Rs 3.6 per cubic meter would only help ONGC break even on sale of gas produced from old fields, sources said.

In a detailed presentation to the committee, ONGC said the price of gas from its new fields should be around 4.75 dollars per mBtu.

Mr Ambani, who met top government officials and the COS formed on the issue of pricing of natural gas from its KG basin, said Reliance's KG-D6 block can help cut the fertiliser subsidy burden by replacing the costly naphtha and other fuels used by fertiliser producers.

The Prime Minister had earlier accorded top priority to the fertiliser sector and suggested to the power ministry to switch to coal instead of using gas to fire their turbines. The Prime Minister had said that any pricing formula must be consistent with the provisions of pricings in the Public Sector utilities.

Moreover, the whole rejig process has to encourage competition, the PM had said.

Apart from the COS, Mr Ambani met Expenditure Secretary Sanjiv Mishra, Fertiliser Secretary Sreedhara Sharma, Principal Secretary to the Prime Minister T K A Nair and Cabinet Secretary K M Chandrashekhar.

He also met Planning Commission Member (Energy) Kirit Parekh on the issue of arriving at a regulated gas price.

In his presentation, he said the gas would be priced at 4.33 dollars per mBtu as the government revenues at this tariff can compensate for rise in fertiliser subsidy.

RIL will begin natural gas production from the prolific Krishna Godavari-D6 block off the east coast from July 2008.

UNI