The Empowered Group of Ministers on Ratnagiri Gas and Power Pvt Ltd on Wednesday decided to pool the price of gas for Dabhol - the basket will comprise the gas sourced by Petronet LNG from international markets and the administered price mechanism gas available in the country.

Sources close to the development said the pooled gas price was expected to be in the region of $5.76 per million british thermal units, while Petronet LNG, which had been asked to source gas for the erstwhile Dabhol project, had bought it at prices in the range of $9-10 /mmbtu.

Petronet LNG has so far managed to source around 1.2 million tonnes of gas, while the plant needs 2.1 MT if it is to operate at the full capacity of 2,184 Mw. This means other APM gas buyers in the country will pay a higher price for their gas, while RGPPL will get it at a concessional price.

RGPPL's Dabhol power plant is the country's largest gas-based power plant. A senior NTPC official said that pooling would see the unit cost of electricity generated by the Dabhol power plant come down to around Rs 3.50, including a variable cost (fuel cost) of Rs 2.6 and a fixed cost of 90 paise.

He said this price might be more acceptable to consumers like Maharashtra State Electricity Distribution Company Ltd. MSEDCL is expected to be the power plant's major customer once full production begins in April 2007.

MSEDCL currently buys power from the plant at over Rs 5 a unit. Sources, however, clarified that the price calculations would work out only if the full quantum of gas was found.

"Otherwise, the fixed cost will go up, depending on how much capacity is lying idle." The ministerial meeting also came down hard on the Gas Authority of India for not completing the Dabhol-Panvel pipeline on time.

The EGoM meeting, chaired by External Affairs Minister Pranab Mukherjee, said GAIL must complete the pipeline by March 2007.