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NEW DELHI, NOV 8: The petroleum ministry has proposed to raise natural gas price by 12 per cent for fertilizer units and 26 per cent for power units in the period prior to complete deregulation of the natural gas sector.
The ministry has moved a cabinet note to raise the price of natural gas from Rs 2850 per thousand cubic metres to a fixed price of Rs 3200 per thousand cubic metres and Rs 3600 per thousand cubic metres to the fertilizer and power sectors respectively on a provisional basis, official sources said.
All gas produced by private firms would be sold at market determined price, which is almost double of the current administered price of Rs 2850 per thousand cubic metres.
Transportation tariff on the trunk HBJ pipeline is also proposed to be increased by Rs 10 per thousand cubic meters, they said.
The ministry has further proposed that the gas price linkage committee for making gas allocations be scrapped and all new gas for new/capacity expansions in the two sectors be valued at market price.
It wants the regulation of gas supplies by state-run ONGC and Oil India Ltd be transferred from the petroleum ministry to sector regulator, petroleum and natural gas regulatory board, once it is formed, until full deregulation of gas prices is achieved.
Sources said the proposal has been strongly opposed by fertilizer, power and steel ministries. The department of fertilizer wants new gas to be priced at Rs 3200 per thousand cubic metres. |