<div>Petroleum minister M Veerappa Moily has categorically stated that there is no rethinking on raising gas prices starting April 1, 2014. "There is no thinking on part of the government for any review or reconsideration of the decision of the CCEA. Let me make it very clear. There is no confusion, there is no vagueness. And I don't think there is scope for any interpretation whatsoever," he said.</div><div> </div><div>Based on a formula suggested by the C. Rangararajan Committee, the cabinet panel approved pricing of domestically produced gas at an average of cost of imported LNG into India and international hub rates. Moily pointed out that the current price of gas based on that formula is $6.83 per mmbtu (million metric British thermal units). Consumers are currently paying $4.2 per mmbtu.</div><div> </div><div>The price in April 2014 will depend on what the market dictates then. As things stand, there is no price at $8.4 per mmbtu. “The price could be higher or lower than $6.83, depending on the market,” says a petroleum ministry official. The prices will be reviewed every quarter, based on the Rangarajan Committee formula for five years.</div><div> </div><div>The petroleum minister also clarified that there will be uniform pricing. What that means is that there would be no distinction between companies as far as gas pricing is concerned.</div><div> </div><div>Earlier it was reported that Finance Ministry has been pushing oil ministry for capping the gas price hike and maintaining old rates for some of the gas of Reliance Industries which it has failed to deliver during past three years at the current price of $4.2.</div><div> </div><div><span style="color: rgb(128, 0, 0);"><strong>Read Also:</strong></span><strong> <a href="http://businessworld.in/en/storypage/-/bw/finmin-asks-oil-min-if-gas-price-should-be-capped/r979310.37491/page/0">FinMin Asks Oil Min If Gas Price Should Be Capped</a></strong></div><div><span style="color: rgb(153, 51, 0);"><strong>Read Also:</strong></span><strong> <a href="http://businessworld.in/en/storypage/-/bw/rbi-asks-oil-cos-to-buy-dollars-from-single-bank/r977931.37491/page/0">RBI Asks Oil Cos To Buy Dollars From Single Bank</a></strong></div><div><span style="color: rgb(153, 51, 0);"><strong>Read Also</strong></span><strong>:<a href="http://businessworld.in/en/storypage/-/bw/india-s-new-gas-price-formula/r975572.37491/page/0"> India's New Gas Price Formula</a></strong></div><div><span style="color: rgb(153, 51, 0);"><strong>Read Also:</strong></span><strong> <a href="http://businessworld.in/en/storypage/-/bw/gas-price-hike-will-benefit-govt-veerappa-moily/r972568.37491/page/0">Gas Price Hike Will Benefit Govt: Veerappa Moily</a></strong></div><div><br />Ever since the government decision was announced on June 27, there has been criticism that it was made to benefit Mukesh Ambani-led RIL.</div><div> </div><div>Finance Ministry on July 4 wrote to Oil Ministry asking it to take appropriate action on suggestions made in two media reports for putting a cap up to which rates can be raised, and RIL being forced to sell the quantity it had committed but failed to deliver in past three years at old rate of $4.2.<br /><br />"The Office Memorandum dated July 4 from the Department of Expenditure, Ministry of Finance... has enclosed two editorials of the newspapers and illustrated some of the issues in these editorials. That cannot be taken as objective opinion of Ministry of Finance. It cannot (also) be considered as query raised by Ministry of Finance," Moily said.</div><div> </div><div>The Cabinet Committee on Economic Affairs (CCEA) had on June 27 approved pricing of domestic gas at an average of cost of imported LNG into India and international hub rates. The price of gas when this formula comes into effect on April 1 could come to about $8.4 per million British thermal unit.</div><div> </div><div>Moily said his ministry had taken opinion of Finance Ministry twice and it was incorporated in the CCEA note.</div><div> </div><div>"I don't think there is another interpretation open to it. It (the CCEA decision) has been done after due deliberation and I think it has taken lot of time and deliberations and once considered view has been taken, we will stick to that," Moily said.</div><div> </div><div>"The CCEA approved domestic natural gas pricing guidelines 2013 based on the methodology suggested by the Rangarajan Committee which will be applicable to all natural gas produced domestically and to all the consuming sectors uniformly," Moily said.</div><div> </div><div>Asked if RIL may be asked to sell some part of its KG-D6 gas at old rate of $4.2 per mmBtu, Moily said the CCEA decision will "apply on all natural gas produced domestically and all the consuming sectors uniformly".</div><div> </div><div>The Ministry of Finance in its July 4 note asked if RIL, which will be a big beneficiary of rates increase, be made to sell the quantity it has failed to deliver as per its own targets during past 3 years at current price of $4.2.</div><div> </div><div>"Once Reliance overcomes the 'technical difficulty' of producing gas at the KG-D6 field, the government must ensure the company delivers the shortfall it still owes at the old price of $4.2 rather than getting the benefit of the new price," it wrote.</div><div> </div><div>But for the first year of production, KG-D6 output was short of target since 2010-11 fiscal. Against the target of 62.1 million standard cubic metres per day in 2010-11, RIL produced 55.89 mmscmd. In the following year, it produced 42.65 mmscmd as opposed to a target of 70.38 mmscmd.</div><div> </div><div>Last fiscal, gas production of 27 mmscmd was way short of target of 86.73 mmscmd. Currently, it is producing 14.01 mmscmd as opposed to a target of over 86 mmscmd.</div><div> </div><div>(With input from agencies)</div>
