GSPC, a firm owned by the Gujarat government, had a contract for buying 1.3 million standard cubic meters of gas per day from PMT for onward sale, at a higher price in the state. The contract expires on March 31, and the company is now using the state politicians to lobby for an extension, sources said. With Union ministers from Gujarat putting pressure, the petroleum ministry is in a fix, as trading of natural gas is not permitted under the governments gas utilisation policy.
GSPC plans to buy gas at the official price of $5.7 per million British thermal unit and sell it at an undefined higher price to customers in the state, they said. On instructions from the Prime Ministers office for a more uniform distribution of the natural resource, the oil ministry had in December 2007 scrapped all contracts for sale of gas produced from PMT fields and nominated GAIL for selling it to fuel-starved fertiliser plants outside Gujarat.
The PMO had wanted to distribute the scarce resource evenly and not restrict it to just one state (Gujarat consumes 42% of the current natural gas supplies).