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Govt approves near doubling of natural gas price

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Govt approves near doubling of natural gas price
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New Delhi: Biting the bullet, the government on Thursday approved near doubling of natural gas prices to $8.4 from April 1 next year, a move which will result in rise in power tariff, urea cost and CNG prices.

This will be the first revision in gas prices in 3 years. The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh approved oil ministry's proposal to price all domestically produced natural gas as per a complex formula suggested by a panel headed by Prime Minister's economic advisor C Rangarajan, a top source told PTI.

The new price will apply uniformly to all producers, be it state-owned firms like Oil and Natural Gas Corp (ONGC) or private sector Reliance Industries. While it was previously said the new rates would apply to regulated or APM gas produced by firms like ONGC immediately, the pricing as per Rangarajan formula will come into effect from April 1, 2014, just when RIL's KGD6 formula of $4.2/mmBtu runs out.

PTI

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