New Delhi, July 23: The group of ministers (GoM) today recommended an increase of Rs 350 per thousand cubic metres (MCM) in the price of natural gas from Rs 2,850 per MCM to Rs 3,200. The proposal will now be sent to the Cabinet for approval.
The gas is consumed mainly by power and fertiliser units and is supplied from the ONGC and OIL fields through the GAIL network. The increase falls far short of the over Rs 4,000 per MCM price that ONGC had sought.
With elections round the corner, the group of ministers has decided to continue the regulation in gas prices as the interests of the vital power and fertiliser sectors have to be kept in mind.
The GoM has also recommended that deductions from the gas pool account will be made only for the subsidy that is being paid to the North-east states or up to a maximum level of Rs 100 crore which ever is lower.
This sum, however, is considered adequate to take care of the entire subsidy of the North-east states. This means that the payments being made by ONGC through the gas pool account to subsidise private companies who are buying gas from the joint venture fields at market prices will be stopped.
The meeting of the group of ministers was chaired by Planning Commission deputy chairman K. C. Pant and attended by the petroleum, power and fertiliser ministers.
The increase has been granted on an ad hoc basis and a price commission will be set up in two to three months time to work out the costs of production.