Govt sets norms for sale of gas from Rel, GSPC fields

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In a move that will impact the freedom of companies like Reliance and GSPC to sell natural gas they have discovered, the Government has decided to set up priority sectors to which the fuel can be sold.

An Empowered Group of Minister (eGoM) headed by External Affairs Minister Pranab Mukherjee, has decided that companies "would sell gas to consumers in accordance with the marketing priorities determined by the Government."

"The sale would be on the basis of formula for determining the price as approved by the government," a senior official said citing the eGoM's decision.

Consumers belonging to any of the priority sector should be in a position to actually consume gas as and when it becomes available.

"Marketing priority does not entail any reservation of gas. So in case consumers in a particular sector, which is higher in priority, are not in a position to take gas when it becomes available, it will go to the sector which is next in order of priority," he said.

The eGoM however said the priority would not impact the process of price discovery that would involve participation by all customers.

For Reliance, which is to produce gas from its eastern offshore KG-D6 field from September, the eGoM decided that the gas will first go to fertiliser units, LPG plants, existing power plants and city gas distribution in that order.