In a move that may virtually rule out any revision of Reliance KG-D6 basin gas price of $4.2/mmbtu before 2014, attorney general GE Vahanvati is understood to have opined that the law doesn?t allow such a revision.
?It is not a matter of policy, it is a matter of law. However, you cannot ignore the five-year period (the price was fixed by an empowered group of ministers in 2009 for a period of five years),? Vahanvati told the petroleum ministry, which sought his views on whether a mid-way price revision was possible.
Reliance Industries had written a letter to the oil ministry and to the Prime Ministers? office a few months ago demanding a early revision of price stating that global gas prices have moved up sharply.
While AG has given its opinion on the matter, a senior official in the oil ministry said that the final decision in the matter will be taken up by the empowered group of ministers (EGoM).
In 2009, an EGoM fixed $4.2/mmbtu as the price of gas produced from the fields where production is faltering. The price was fixed for a period of five years and was supposed to come up for revision only in 2014.
The company is demanding a revision in price at a time when the output from it?s most prolific KG-D6 field is constantly declining. At present, the current output stands at around 30 mmscmd and is likely to fall further to 20 mmscmd by 2014. Any revision in the prices of gas has to be taken by EGoM which is headed by the finance minister.