The Hindu : National : EGoM on gas pricing to meet

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Wednesday, Aug 29, 2007
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EGoM on gas pricing to meet

Sujay Mehdudia

NEW DELHI: The Empowered Group of Ministers (EGoM) headed by the Minister for External Affairs, Pranab Mukherjee to look into the “sensitive issue” of pricing and utilisation of natural gas produced from the Krishna Godavari Basin fields is likely to meet on August 27 amid pressure from the Left and other parties to make the whole process “transparent” and in the interest of consumers.

Official sources said the EGoM would look into the reports of the Committee of Secretaries headed by the Cabinet Secretary and also that of the Economic Advisory Council (EAC) of the Prime Minister that had pointed out to a lack of transparency in the bidding process adopted by Reliance Industries Limited (RIL) and putting in place a formula that was in the interest of the consumers and completely transparent. RIL is already locked in a legal battle with the National Thermal Power Corporation on the issue as well as the Reliance Natural Resources Limited.

The EAC had even advised that immediate action should be taken to invite fresh bids in a transparent manner from all parties in a position to lift the gas so as to discover the true arms length competitive price of gas. On its part, the Left parties have also approached the Prime Minister, Manmohan Singh, to intervene in the matter and not to accept the formula submitted by RIL. Communist Party of India (Marxist) MP, Tapan Kumar Sen has also voiced his serious concern on the issue to the Prime Minister in writing and during a discussion in the Rajya Sabha last week.

RIL has proposed a gas price of $4.33per million British thermal units to $4.58per mBtu, something that has been strongly opposed by key consuming sectors like fertilizer and power sectors in general and by Anil Ambani. The Petroleum Ministry has maintained that the Government should honour the commitment it has made in the New Licensing Exploration Policy document for allowing the private player to fix the price, a point that also has found favour with the CoS.

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