An empowered group of ministers (eGoM) is currently looking into the issue of commercial utilisation and pricing of gas by Reliance Industries Limited (RIL) and other contractors, who have been awarded exploration blocks under the new exploration and licensing policy (Nelp) regime.

The ministerial group, headed by external affairs minister Pranab Mukherjee, has held two meetings (on August 27 and 28) so far and is supposed to meet again on September 3.

Although a clear consensus is yet to emerge, a dig into the discussions that took place on August 27 meeting does, however, signals that a final verdict can be expected soon.

Presenting his views before the eGoM, finance minister P Chidambaram favoured acceptance of the pricing formula proposed by Reliance for sale of gas from its D-6 field in the K-G basin. As per the formula, the price of gas works out to be $4.33 per million British thermal unit, a rate that power and fertiliser units feel is ?too high?.

As per the minutes of the first eGoM meeting, Chidambaram told the ministerial group that, ?The economic advisory council (EAC) has already examined it and has commented that it is as per international practices. We should accept the EAC report as we are not experts on the subject. If required, we may request EAC to have the formula explained to the eGoM.?

Chidambaram further added that the eGoM?s concern should be pricing and not the valuation that will determine the government?s share in the profit. This aspect can be taken up by the ministerial group later, he said. ?Once the pricing is approved, the contractor, RIL, can be asked to supply the natural gas to the sectors we prioritise, at the same price. The issue of cash or kind is irrelevant as the gas would anyway go to the prioritised sector,? he said.

As per the minutes, petroleum secretary MS Srinivasan told the eGoM that the proposed pricing formula of RIL leads to prices as prevailing in the market. ?At these prices, fertiliser subsidy would come down and the cost of power generation would also be comparable with power generated from imported coal,? he told the eGoM.

Cabinet secretary KM Chandrasekhar, however, pressed for the gas utilisation and pricing policies to be framed before approving a price for RIL gas.