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Mumbai, Nov 17 : Even as the Bombay High Court has adjourned the hearing on the dispute between RIL and RNRL over the KG D6 gas pricing, the empowered group of ministers (EGoM) headed by the external affairs minister Pranab Mukherjee has convened its meeting on November 20 to deliberate gas pricing issue.
Sources at the ministries of petroleum and power have confirmed that November 20 meeting is crucial when the centre in its affidavit to the Bombay high court has submitted that a price less than $4.20 per million British thermal unit (mmBtu) is not envisaged as per EGoM decision taken in accordance with the provisions of the production sharing contract (PSC). Sources told FE on Monday that the government also made it clear that the gas will have to be sold in the country as per the government’s policy and the pricing formula based on PSC.
Sources said that EGoM is expected to discuss whether the price of $4.2 per mmbtu approved by it only for the purpose of valuation of Government Take and not for sale in line with its earlier decision and PSC provisions.
EGoM had approved a formula leading to price of $ 4.2 per mmbtu on September 12,2007 for domestically produced natural gas which will be applicable for a period of 5 years from date of commencement of production. Further, the petroleum minister on October 21 told the Rajya Sabha that “ The formula or basis on which the prices shall be determined for the purposes of determining the government take is required to be approved by the government prior to sale of natural gas to the consumers/buyers. Accordingly, Reliance Industries Limited (RIL) submitted a proposal on 18.5.07 for approval of gas price formula which was arrived at by following a bidding process. The price basis/formula for the purpose of valuation of natural gas has been approved by the Government in case of block KG-DWN-98/3 of RIL/Niko.”
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