Paswan questions pricing and utilisation of gas from KG Basin

Patna, Sept 06 (UNI) Union minister of Chemicals and Fertilisers Ram Vilas Paswan has expressed strong reservations about the utilisation and pricing of gas from the KG Basin and suggested the Empowered Group of Ministers(EGoM) to '' look into the issue carefully before finalising its recommendations''.

In a recent letter to EGoM Chairman and External Affairs minister Pranab Mukherjee, Mr Paswan, also the Steel minister, felt that the ''government needs to have a utilisation and pricing policy of gas before any decision on formula or basis on which the price of gas is to be determined''.

Referring to his discussions on the important issue with the concerned ministers, Mr Paswan said before finalising its recommendations the EGoM should also listen to 'all stakeholders' and look into all the issues in totality and carefully.

He said even if the decision on formula required to be expedited, broad contours of the utilisation and pricing policy for gas was needed to be laid down to have a consistency in the decision making process.

Claiming that the 'limited bidding' of the contractor in the issue was not transparent, Mr Paswan said under the production sharing agreement the price of gas was to be determined on the basis of a goverment approved formula. Since the formula was devised by the contractor himself,its basis was not very clear.

As such,the Chemicals and Fertilisers minister pointed out,the basis of this formula, its reasonableness should have to be looked into because the bidding was not only restricted to ten selected bidders but also they were asked to quote only a very small component of the overall formula.

He said though the fertiliser industry quoted the lowest possible price within the formula to ensure availability of gas for their units, the total volume of gas was not indicated to the bidders.

Moreover, the formula contained both rupee and dollar components making it susceptible to rupee-dollar exchange rate.

'' In my view, the price should have some relationship with the cost of production with a resonable profit to the contractor'', Mr Paswan in his letter to Mr Mukherjee pointed out and reiterated his suggestion for a further look into the whole issue on priority basis.

UNI