EGoM to meet again tomorrow on gas pricing

New Delhi, Aug 27 (UNI) The first meeting of Empowered Group of Ministers (EGoM) to decide on gas pricing today remained inconlusive and decided that the meeting will be held tomorrow again.

''The meeting was inconclusive. We will meet again at 6 pm tomorrow,'' Petroleum Minister Murli Deora told reporters after the meeting of the EGoM here late evening.

Meanwhile, the oil ministry said the government has no role in fixing prices in areas auctioned since 2000 to companies such as Reliance Industries.

EGoM, headed by External Affairs Minister Pranab Mukherjee, met today to decide on the vexed issue of gas pricing and utilisation of gas from new fields like the KG-D6 of Reliance Industries.

Official sources said the Petroleum Ministry told EGoM that the government can only approve the gas formula, as per Production Sharing Contracts (PSCs) signed with the firms for areas auctioned under New Exploration Licensing Policy.

Drawing from its right under the contract for KG-D6 block, RIL mooted an increase in gas price from 4.33 dollars per million British thermal unit (mBtu) to 4.58 dollars.

It has been opposed by key consuming sectors like fertiliser and power, and Mukesh Ambani's younger brother Anil Ambani.

The CoS, under the Cabinet Secretary K M Chandrasekhar, in its report upheld RIL's right to fix the price of gas, saying the sovereign commitment given in NELP can't be altered.

It, however, had asked the Petroleum Ministry to frame a Natural Gas Utilisation Policy and Natural Gas Pricing Policy before approving RIL's gas price.

EAC found RIL's pricing formula to conform to market practice and said allocations made to priority sectors like fertiliser and power should only be at a market driven price.

It, however, wanted RIL to invite bids for setting the price again.

The EGoM comprises of Finance Minister P Chidambaram, Petroleum Minister Murli Deora, Power Minister Sushilkumar Shinde, Fertiliser Minister Ram Vilas Paswan, Law Minister H R Bhardwaj, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Corporate Affairs Minister Prem Chand Gupta.

RIL had won the KG-D6 block in first round of NELP in 2000 and plans to produce gas from KG-D6 from July 2008.

It was the first company to strike gas at the Krishna-Godavari basin in the first round of NELP announced by the government in 2000.

UNI