The finance and legal affairs ministries have backed the petroleum ministry?s stand that the government?s intervention in the issue of gas-pricing under new exploration and licensing policy (Nelp) regime be limited to allowing pricing on the arm?s-length principle.
A member of an empowered group of ministers (EGoM) told FE the ministerial body acknowledged that any intervention in price discovery by the government at this stage might not go down well with investors. A move like this could deter investments in prospective deepwater blocks that are considered big-ticket.
?A consensus has already emerged on honoring the production-sharing contract. What is being debated now is whether any policy on gas utilisation and pricing could be made applicable retrospectively to the discoveries which are already on the verge of production,? he said, adding that imposing the two policies at this stage would violate the sanctity of the marketing and pricing freedom allowed under Nelp contracts.
Headed by external affairs minister Pranab Mukherjee, the EGoM is to decide on the pricing and utilisation of gas based on reports by the Cabinet secretary and the Prime Minister?s Economic Advisory Council. The EGoM?s second meeting on Tuesday also remained inconclusive. ?We will meet again in a day or two,? petroleum minister Murli Deora said.