Prices of natural gas need to be decided by market forces: 12th Five Year Plan

SME News, Monday, Sep 24, 2012 12:09:57 PM IST

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NEW DELHI: Since Petroleum and Natural Gas Ministry has opposed Reliance Industries' demand for higher gas price, the 12th Five Year Plan document has stated that the natural gas prices should be decided by market forces.

Presently, India has 15 various rates ranging from $2.52 per million British thermal unit to $6.77 per mmBtu for natural gas produced from local fields. The highest rate is about half the rate at which the India imports gas in ships in its liquid form (liquefied natural gas).

Apart from giving nod to price, Centre also decides gas users and sanctions quantities, which leads to hurdles to gas market development.

Reliance Industries sells natural gas produced from its eastern offshore KG-D6 fields at $4.205 per mmBtu and has been demanding rates equivalent to price India pays for importing LNG.

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