JOIN US"Effective December 1, ONGC and OIL have been allowed to charge up to USD 5.25 per million British thermal unit for 7-8 million standard cubic meters per day of gas that is sold to non-power and non-fertilizer sector," a senior government official said.
The rates set would be excluding cess, transportation charge, marketing margin/service charge and taxes.Natural gas produced by ONGC and Oil India Ltd (OIL) from fields given to them on nomination basis is sold at government controlled price, called APM (Administered Pricing Mechanism) rate.
The APM price for priority sectors like power and fertilizer was in June more than doubled to USD 4.2 per mmBtu, but users in other sectors continued get the fuel at 2005 price of up to USD 4.75 per mmBtu."The anomaly has now been corrected," the official said.
The decision would result in ONGC revenues going up by about Rs 200 crore annually.
As per the Oil Ministry order, consumers in western and northern part (states of Maharashtra, Gujarat and other states covered by GAIL's Hazira-Vijaipur-Jagdishpur and Dahej- Vijaipur pipeline such as Rajasthan, Madhya Pradesh, Uttar Pradesh, Haryana and Delhi) will pay USD 5.25 per mmBtu.
Users in Rajasthan, south Gujarat and isolated customers in Gujarat, which are getting gas from identified onshore fields, would be charged USD 5 per mmBtu while the same in Tamil Nadu and Andhra Pradesh would pay USD 4.75 per mmBtu and USD 4.5 per mmBtu respectively. Consumers in North-East region would pay USD 4.2 per mmBtu.
The official said the government had in 2005 decided that APM gas will be sold only to power, fertilizer and small users. But some non-priority users not connected to any other source were allowed to continue using the gas subject to they paying a market price.
So, users in western region paid USD 4.75 per mmBtu, a rate equivalent to the then prevalent price of gas from privately-operated Panna/Mukta and Tapti fields. Consumers on the east coast paid USD 4.3 per mmBtu, the same price as charged by Cairn India for gas from Ravva fields.
Naturally, these rates should have also been increased when Panna/Mukta and Tapti field gas price was revised to USD 5.73 per mmBtu. But this did not happen.
The government had from June 1 raised APM gas price for core consumers to USD 4.2 per mmBtu, at par with the rate at which Reliance Industries sells gas from its KG-D6 fields.
APM gas, prior to June 1, was sold at Rs 3,200 per thousand cubic metres or USD 1.79 per mmBtu.