Reliance seeks threefold hike in KG-D6 gas price
Put simply, this means that if RILís proposal is accepted, the price of domestic gas at current LNG spot rates will be close to $12 per mmBtu. This is about three times the $4.20 per mmBtu that RIL gets for its KG-D6 gas at present. Such a hike in price could jack up the cost of gas -based power and fertiliser considerably, although the new price is meant to be effective post 2014.
Of course, the actual price impact will hinge on the LNG market. Analysts, however, donít see LNG prices coming down significantly in the near future.
RILís executive director PMS Prasad wrote to the Rangarajan panel on October 30: ďSince domestic gas substitutes imports, the price of LNG imported reflects the price of gas consumers are willing to pay in the open market.Ē
Besides, he said, import-parity principles are used for all other oil products in the country and under the production-sharing contracts, oil and gas cannot be treated differently.
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