India Oil Ministry Recommends Gas Price Hike

India’s Oil ministry has moved a Cabinet note to raise the price of natural gas produced by government-owned ONGC and OIL as well as private firms like Reliance Industries to $6.7, less than $8-8.5 hike previously expected, Press Trust of India reported.

The note proposes raising prices immediately for state rum firms and that for RIL from April 2014, sources told Press Trust of India. ONGC/OIL and RIL currently get $4.2 per million British thermal unit as the price of natural gas. 

The ministry wants Rangarajan Committee recommendation of pricing domestically produced natural gas at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery be accepted with a minor modification. 

Sources said ministry wants the pricing formula proposed by the panel to apply to all forms of natural gas - conventional, shale and coal-bed methane (CBM), Press Trust of India said. Also, the price determined shall be applicable to all consuming sectors uniformly.