R.S. Pandey (second from left) in New Delhi on Thursday. (PTI)

New Delhi, Sept. 25: The government today ruled out a review of the administered price mechanism for gas and said a more pressing need was to improve supply.

According to petroleum secretary R.S. Pandey, “The first thing is to improve supply. Price can find its own balance.” Public sector Oil and Natural Gas Corporation (ONGC) had been demanding a rise in the price of gas to $4.2 per million British thermal units (mBtu) from $1.9, on a par with the price of Reliance Industries’ gas from the Krishna-Godavari basin fixed by an empowered group of ministers.

A section of the government has also been talking of the need to raise the price of the gas fixed by the ministers as prices in the international markets are in the range of $10-12.

The government is not keen on burdening gas users with higher prices. Increasing prices means it will have to increase subsidies to fertiliser firms, who are one of the major users of gas.

“Where is the competition now? How can the price be fair when the market is controlled by the suppliers? In such a scenario, the government will have to determine the pricing formula of gas to balance the interests of both the suppliers and consumers,” Pandey said on the sidelines of an industry conference.

ONGC is losing Rs 700 crore by selling gas below costs. Its chairman R.S. Sharma said the company was looking for acquisitions of oil and gas properties in Latin America, the countries of the Commonwealth of Independent States and the west coast of Africa.

“There is hunger for growth and the appetite is huge. We are looking for quality acquisitions,” Sharma said.

Pandey said India was still interested in going ahead with the Iran-Pakistan-India pipeline.

Earlier this week, Tehran and Islamabad had agreed to form a joint company to raise funds for the pipeline.

Officials of the three countries will meet soon, Pandey said, but did not indicate when.

Oil hunt

The government today said the winners of the seventh round of bidding for oil and gas blocks would get the blocks by October 15.

The next round of bidding for oil and gas as well as coal bed methane blocks would begin later this year.

India is competing with Africa and South America to attract bidders for its oil and gas assets.