gas in ships.
Unlike GSPC, RIL did not set any floor or cap. At a USD 100 per barrel JCC average, CBM was to cost USD 12.67 per mmBtu plus USD 0.26 per mmBtu, totalling USD 12.93 per mmBtu.
GSPC, which sought bids by March 12, said it will charge an additional marketing margin of Rs 10.21 per mmBtu while the consumer will also have to bear all taxes, duties, levies on sale of gas as well as transportation cost and duties and taxes thereon.
RIL then extended this pricing formula for its eastern offshore KG-D6 gas when the current USD 4.205 per mmBtu rate expires in March 31, 2014.
While the Oil Ministry has accepted a complex international hub-based pricing formula suggested by Rangarajan Committee for all gas produced in the country, GSPC said it as per Production Sharing Contract (PSC) provisions is seeking to discover gas price through competitive arms length basis.
Price of gas as per Rangarajan panel recommendation would come to USD 8-8.5 per mmBtu.
Great Eastern Energy Corp (GEECL) is selling CBM produced from its Raniganj block in West Bengal at USD 6.79 per mmBtu, while domestically produced natural gas is priced at USD 4.2 to USD 5.73 per mmBtu.
RIL had sought a marketing margin of USD 0.15 per mmBtu from CBM users, even though its USD 0.135 per mmBtu marketing margin charged on KG-D6 gas has been sent to oil regulator PNGRB for review.
Sources said the Oil Ministry was reluctant to approve the price sought by RIL as nowhere in the world is domestic gas priced at LNG rates.
RasGas of Qatar prices the 7.5 million tonnes a year (about 30 mmscmd) of gas it sells to Petronet LNG Ltd at 12.67 per cent of JCC. Another USD 0.26 per mmBtu is the cost it takes for shipping the gas cooled to turn it into liquid (called LNG) in cryogenic ships.
RIL adopted this formula and has sought pricing of its CBM as well as KG-D6 gas in line with it.
Now, GSPC too has adopted the formula and has changed JCC with widely quoted Brent crude oil.