Govt mulls 33% hike in regulated gas price

The Petroleum Ministry proposed a 33% hike in the price of natural gas produced by ONGC and Oil India and gradually increase it to US$4.20 per mmBtu set for gas from Reliance Industries Ltd.'s (RIL) KG-D6 fields. The ministry circulated a Cabinet note for raising price of gas under administered pricing mechanism (APM) from Rs 3200 per thousand cubic metres (US$1.8 per mmBtu) to Rs 4,250 per thousand cubic metres (US$2.4 per mmBtu). Price of APM, or the gas produced from fields given to ONGC and OIL on nomination basis, is proposed to be raised in stages to Rs 7,500 per thousand cubic metres or US$4.2 per million British thermal unit by 2013. The price set for RIL's eastern offshore KG D-6 gas (US$4.2 per mmBtu) is being considered as the benchmark for market price of indigenously produced gas in the country. Producer price for ONGC is proposed at Rs 3,870 per thousand cubic metres from Rs 3,200 per thousand cubic metres. The consumer price would be 10% higher. For OIL, the producer price has been proposed at Rs 4,310 per thousand cubic metres.