'RIL to get more than $8.4 price for gas starting next fiscal'
Mukesh Ambani group's flagship company Reliance Industries (RIL) will get $8.4 price for the natural gas from its eastern offshore KG-D6 fields from April 1, 2014 and potentially higher rates in following quarters, its minority partner Niko Resources said.
Going by the Rangarajan committee pricing formula effective from April 1, 2014 for a period of five years, RIL is expected to get "about $8.40 per million British thermal unit for gas, double the price of $4.20 for current gas sales from the D6 Block," it said.
Niko also confirmed that the Cabinet Committee of Economic Affairs (CCEA) has approved a new pricing formula for domestic gas sales in India based on the Rangarajan panel recommendations.
"The pricing formula is based on the average of the prices of imported liquefied natural gas (LNG) into India and the weighted average of gas prices in North America, Europe and Japan," the Canadian firm said.
Under the approved price formula, starting next fiscal (2014-15) the price for each quarter will be calculated based on the 12-month trailing average price with a lag of one quarter. This effectively means that the gas price for April to June 2014 period will be based on the averages for 12 months-ended December 2013, it said.
Also, this gas price was indicated in the Annexure that the Oil Ministry attached to the main Cabinet note on pricing of domestic gas as per a formula suggested by the Rangarajan panel.