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ONGC, OIL can fix price of natural gas

04 Jun 2010 Evaluate

In a significant development, the government has given national oil firms ONGC and OIL freedom to price any additional natural gas produced from blocks given to them on nomination basis at market rates. So far, all gas — current and future — produced from blocks given to Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) was priced at government-controlled rates, called APM. The Petroleum Ministry, in an order dated May 31, has now made a distinction between existing producing fields and new ones in the nomination blocks. “ONGC and OIL would have the freedom to sell any production from new fields in their nominated blocks at non-APM rates,” the order said. Even the price of APM gas from June 1 has been more than doubled to $4.2 per million British thermal units, at par with the rate at which RIL sells gas from its eastern offshore KG-D 6 fields.

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283.95 1.20 (0.42%)
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