The oil ministry has mooted a new allocation policy for the KG-D6 gas. If that goes through, the power sectors gain will be the fertilizer sectors loss.
The Empowered Group of Ministers (EGoM) notice has been finalised by the oil ministry but the date of the meeting has still not been notified by the government reports CNBC-TV18’s Nayantara Rai. Also read: Reliance Industries will invest $5 bn in KG block EGoM is looking is at diverting KG-D6 gas supply to the tune of almost 10.79 mmscmd to the power sector. Nearly 9 mmscmd of that will be coming from the fertilizer sector which will of course impact the urea production in the country. The urea production is expected to fall by 4.54 million metric tonnes and increase the subsidy burden by Rs 5,372 crore. The government feels this will be a good idea because since all of this gas will be diverted to the power sector and there could be an additional power production of almost 17000 million kilowatt’s per annum and have an annual saving also of about Rs 5372 crore.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
