Government mulls common pool price for gas sales | business | Hindustan Times
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Government mulls common pool price for gas sales

business Updated: Aug 10, 2009 21:42 IST
Anupama Airy

To avoid further litigation over pricing and allocation of gas in the context of the ongoing tussle between the Ambani brothers, the government is planning to introduce a common pooled price of natural gas in the country.

Mukesh and Anil Ambani are engaged in a dispute over gas produced from the D6 block in the Krishna Godavari basin. “We have asked GAIL to appoint a consultant who can advise the government on moving towards a uniform gas pricing regime,” petroleum secretary RS Pandey told Hindustan Times.

This means that all natural gas produced in India — be it from fields allotted to contractors under the New Exploration and Licensing Policy (NELP) or pre-NELP and nominated blocks — will have a single price.

Under NELP, the government auctions potential oil and gas fields for exploration by state-owned as well as private companies, both Indian and foreign.

According to a July 27 petroleum ministry letter to GAIL, the consultant will advise the government whether “common pooled pricing of natural gas should be implemented as a policy directive or through an Act”.

The consultant is also mandated to advise on any possible conflict between pooled pricing and existing contracts.

“The consultant will also study the international experience and gas pricing models prevalent in countries like Europe, USA and China,” a senior official said. “The consultant would be given two months to complete the study.”