Gas pricing meet likely on Aug 27

A group of ministers, constituted to look into pricing and utilization of natural gas produced from new fields like the KG-D6 of Reliance Industries, is likely to hold its first meeting on August 27.

The Empowered Group of Ministers, headed by External Affairs Minister Pranab Mukherjee, is slated to meet on August 27 to decide on pricing and utilisation of gas based on inputs from a committee of secretaries and Prime Minister's Economic Advisory Council that went into the whole issue.

RIL, drawing from its right under the contract for KG-D6 block, proposed a gas price of 4.33 dollars per million British thermal unit to 4.58 dollars per mBtu, rates that were opposed by key consuming sectors like fertilizer and power in general and Mukesh's younger brother Anil in particular.

The CoS, headed by Cabinet Secretary K M Chandrasekhar, in its report upheld RIL's right to fix price of gas and said the sovereign commitment given in NELP cannot be altered. It, however, asked petroleum ministry to frame a Natural Gas Utilisation Policy and Natural Gas Pricing Policy before approving RIL's gas price.

EAC on the other hand has found RIL's pricing formula to conform to the market practice and said allocations made to priority sectors (like fertilizer and power) should only be at market determined price.

It, however, wanted RIL to invite bids for setting the price again. The EGoM comprises of Finance Minister P Chidambaram, Petroleum Minister Murli Deora, Power Minister Sushilkumar Shinde, Fertilizer Minister Ram Vilas Paswan, Law Minister H R Bhardwaj, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Corporate Affairs Minister Prem Chand Gupta.