Times of India: RIL May Have to Sell CBM Gas at $3.8

The Mukesh Ambani-led Reliance Industries (RIL) has received a setback with the government clarifying that the prevailing natural gas prices will apply to coal bed methane (CBM) producers as well. This means RIL will have to settle for one third of the $12 per mmBtu (million British thermal unit) it had sought for gas set to be generated from next month at its Madhya Pradesh CBM blocks.

Oil minister Dharmendra Pradhan told TOI, "We don't come out with company-specific policy. It (gas pricing) is a government of India policy and applies to all players, including Reliance, and there is no change."

The current natural gas price in India is $5.1 per mmBtu — approved by the NDA government — and is expected to come down to $3.8 per mmBtu when it is revised in September-end. This will be much below the $4.2 per mmBtu that the companies were getting until last year under the UPA regime. MORE