India Ltd by over 17 per cent and index it to inflation rate to help the two firms cut losses on selling fuel below cost.
The Petroleum Ministry has prepared a draft Cabinet note for raising prices of natural gas produced by ONGC from fields given to it on nomination basis to Rs 3,765 per thousand cubic meters (or $1.98 per million British thermal unit) from current Rs 3,200 per thousand cubic meter ($1.68 per mmBtu).
For OIL, the gas price has been proposed at Rs 4,205 per thousand cubic meters, a senior ministry official said.
ONGC currently loses about Rs 3,000 crore in revenues annually on selling gas from fields like Bassein and Mumbai High at Government capped price.
"The Cabinet note is ready and will be circulated once Petroleum Minister Murli Deora approves it. In all likelihood, the proposal may go to Cabinet sometime next month," he said.
The price would change by Rs 55 per thousand cubic meter for every 10 points change in Wholesale Price Index (WPI).
Price of gas produced by ONGC and OIL from fields given to them on nomination basis, called the Administered or APM rate, were last revised in June 2005.
APM price would be raised to $4.20 per mmBtu in stages over the next three years, the official said adding this would bring rates at par the sale price of gas produced by Reliance Industries from its giant KG-D6 fields.