GoM recommends hike in gas prices

NEW DELHI: The group of ministers (GoM) set up to examine natural gas prices on Wednesday recommended an increase of Rs 350 per tcm (thousand cubic meters) to Rs 3,200 per tcm.
The GoM also suggested increasing gas transportation charges through the Hazira-Bijaipur-Jagdishpur (HBJ) trunk pipeline to Rs 1,160 per tcm per day from Rs 1,150 per tcm a day.
The recommendations will now go to the cabinet for approval.
The new prices will remain static for the next six months and be applicable to gas produced by Oil and Natural Gas Corporation and Oil India Ltd from fields that were nominated to them by the government.
However, the two state-run firms will have the freedom to sell gas from joint venture fields ^ such as the Tapti offshore field -- at the market determined price.
The move will boost the bottomlines of both the state-run oil and gas producers as well as gas utility GAIL which owns and operates the HBJ pipeline.
A tariff committee would also be set up to study the costs and suggest reasonable price for the period till complete deregulation of gas prices come about.
Under the current policy, gas produced by ONGC and OIL is capped at Rs 2,850 per tcm. For gas produced from joint venture fields like Ravva, Cairn Energy of UK (operator of the field) is paid international price, while ONGC sells the same gas to its customers at the cap price, thereby providing a subsidy of Rs 1,300 crore annually.