Moily pulls Reddy note against KG price hike
Ministry sources attributed the decision to the matter being considered by the six-member Rangarajan committee, but is widely perceived as a sign of moderation in the way the government views RIL’s demand. Moily’s move also reflects the government’s anxiety to ramp up domestic gas output, crucial for the energy-starved economy.
Reddy had said that Reliance’s demand for a price revision before the expiry of the period of the current price of $4.2/mmBtu (fixed in 2007 and implemented in 2009 for a five-year period) would result in a additional subsidy burden of $6.3 billion on the exchequer.
The company itself later withdrew the demand for price revision before April 1, 2014, but has insisted on linking domestic gas price to global prices under any subsequent production sharing contract. The company wants gas price post-March 2014 to be about 10% below the price of LNG imported from Qatar — which means a three-fold increase in the price at current rates.
Sources said the ministry was likely to move a fresh note on the revision of KG-D6 gas price for the newly-constituted empowered group of ministers headed by defence minister AK Antony only after assessing the report of the Rangarajan panel. Reddy’s note was circulated for inter-minister-ministerial opinion but
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