OilMin U-turn on RIL KG-D6 gas price
0.5 billion at current year production level of around 25 million standard cubic metres per day.
Sources said the ministry stated that a USD 10 rise in gas price would result in increase in subsidy paid on fertiliser and power by USD 6.3 billion.
The Ministry, however, in the note did not state that RIL had modified its January request for a price revision to clearly state it is seeking rate revision only from April 1, 2014 when the current price is due to expire.
RIL first in June and then again on September 6 reiterated its demand for a price at par with the rate India is paying for import of liquefied natural gas (LNG) from April 1, 2014 when the current five-year period of USD 4.2 price expires.
It wants to price KG-D6 gas at 12.67 per cent of JCC, or Japan Customs-Cleared crude, plus USD 0.26 per mmBtu.
At USD 110 per barrel oil price, gas will cost USD 14.23 per mmBtu.
Sources said the company has also proposed to price gas it plans to produce from coal seams, called coal-bed methane (CBM), from Sohagpur blocks in Madhya Pradesh according to the same formula.
Its CBM pricing formula as well as Essar Oil's demand for USD 4.2 per mmBtu price of CBM from its Raniganj block in West Bengal had been referred Rangarajan for review.
The EGoM had in 2007 fixed USD 4.2 per mmBtu price of KG-D6 gas for first five years of production. RIL began
