Govt is not mulling change in new gas price: Moily

Brushing aside political criticisms about gas price revision, oil minister Veerappa Moily said the government is not mulling any change in new gas price regime, reports CNBC-TV18.

He further said that there is no question of reviewing decision on gas price revision and the gas price formulae will be applied uniformly. He also denied receiving any proposal to cap natural gas price
Indicative gas price for April-June is around USD 6.83/million metric British thermal units, said the minister. Read This:Reliance Industries falls; gas price revision to help state-run peers According to reports,the finance ministry is learnt to have disagreed with the formula and has suggested an alternative that takes into account well-head prices of suppliers in Qatar, Oman and Malaysia. While opposing the Rangarajan formula,the finance ministry said there was no logic in linking domestic price with spot LNG contracts. The Cabinet Committee on Economic Affairs (CCEA) had on June 27 approved pricing of all domestic gas through Rangarajan formula from April 1, 2014. The price of gas as per the formula is likely to be about USD 8.4 per million British thermal unit (mmBtu) as opposed to USD 4.2/mmBtu currently. After the recent gas price revision announcement, research firm Crisil had said that after the price revision, realisations of upstream companies and consequently profitability would increase."With the implementation of the committee's recommendations, domestic gas prices are expected to increase to USD 8.4 per mmbtu from USD 4.2-5.7 per mmbtu at present. APM gas prices would be revised with effect from April 1, 2014, whereas the prices of gas produced from fields, as determined by the production sharing contracts (PSCs), will be revised as and when they are due for revision as per the contract. After the price revision, realisations of upstream companies and consequently profitability would increase," stated the report. Tata Chemicals welcomed the Government’s new pricing policy for gas. R Mukundan of Tata Chemicals told CNBC-TV-18 that their prime concern is over the power sector being given priority on gas allocation.