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Our Bureau

New Delhi, July 6

Gas producers – the state-owned ONGC and private sector Reliance Industries Ltd (RIL) – are likely to be called next week to make separate presentations before the Committee of Secretaries (CoS) examining the pricing issue of gas produced from the Krishna-Godavari Basin.

The CoS comprising Secretaries of Petroleum, Power Fertiliser, Expenditure and Law, which met today was to hear the fertiliser and power ministries’ views on the issue of gas pricing . The Fertiliser Ministry’s views will be heard on Tuesday.

While the fertiliser industry maintained that the delivered price of gas from RIL’s prolific KG-D6 block should not exceed $5 per million British thermal unit (mBtu), the power sector is understood to have proposed the Government should take its share of gas in kind.

As per the proposed pricing formula of RIL, the gas would be delivered in Andhra Pradesh, Maharashtra and Gujarat at a price between $5.2 and $6.2 per mBtu (including marketing margins, transportation and taxes) depending on distance from the gas field.

The price sought by RIL was $4.33 per mBtu. To this, the Fertiliser Ministry is understood to have said that the incremental fertiliser subsidy would be $7.4 billion. Indications are that the Petroleum Ministry has disputed this argument.

Power Ministry said electricity will cost Rs 5.10 per unit at RIL price. As regards the Government taking its share in cash or kind, the Petroleum Ministry is understood to have held the view that the share of profit petroleum in kind would vary from year-to-year depending on the investments.

More Stories on : Petroleum | Oil & Natural Gas Corporation Ltd | Reliance Industries Ltd

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