In the backdrop of continued shortfall in natural gas output from the KG-D6 block and nearly 24,000 MW of gas-based power plants being hit badly by the gas crunch, the Prime Minister’s Office (PMO) has asked the Power Ministry to come out with a detailed note on availability of gas from various sources and implications of gas price pooling for the economy as such and individual stakeholders, in particular.

Under the gas price pooling mechanism proposed, LNG import price would be pooled with the domestic natural gas price, and, accordingly, an average price would be worked out for power producers. The urgency of the matter has been conveyed by Pulok Chatterjee, Principal Secretary to the Prime Minister, who has asked the Power Ministry to prepare the note on gas price pooling for the consideration of the Cabinet Committee on Investments (CCI). The PMO wants the matter to be placed before the CCI next month, it is learnt.

Stalled plants

The stalled power plants that would be gain from this move include Reliance Power’s Samalkot, GMR’s Vemagiri, GVK’s Gauthami and Konaseema plants and Lanco’s Kondapalli project in Andhra Pradesh.

If the price pooling of gas takes place, it would mean increased cost of fuel and also ultimately higher power tariffs for customers. The power companies would have to approach the regulator to seek approval for passing on the additional fuel cost to consumers and state distribution companies. A delegation of the heads of private power producers, including Anil Ambani (Reliance Power), G. M. Rao (GMR) and Madhusudan Rao (Lanco), met Petroleum and Natural Gas Minister Veerappa Moily seeking his intervention in the matter.

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