New fertiliser units to be viable with gas at $7-8/mmBtu

So far we've been hearing the likes of Oil and Natural Gas Corporation (ONGC) and Reliance Industries (RIL) talking about the need to hike gas prices. Now a government panel working on the new urea investment policy is working on the premise of higher gas prices.

Chaired by Planning Commission member Saumitra Choudhary, the Committee of Secretaries says new fertiliser units should plan new investments factoring in a domestic gas price of USD 7-8 per million metric British thermal units (mmBtu). This panel says the current gas price of USD 4.2 per mmBtu is an inadequate incentive for increasing India's gas production and thus sees wellhead prices at USD 7-8 per mmBtu over the next two to three years. The report is expected to be sent to a GoM for consideration.