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Prime Minister’s Office calls meet on gas pricing

The PMO calls a meeting of the Energy Coordination Committee to take up sectoral allocations, reports Arun Kumar.

business Updated: Jun 25, 2007 01:21 IST
Arun Kumar

What started as a fight between the Ambani brothers over gas pricing has taken a new dimension with ministries like petroleum, fertiliser, power and even the Prime Minister’s Office (PMO) getting involved in the issue.

The PMO has called a meeting of the Energy Coordination Committee on Tuesday to review the gas scenario in the country. In a letter to the petroleum ministry, the PMO stated, “The Prime Minister wants particular attention be paid to gas availability, gas imports, estimated demand and supply over the next decade under different scenarios, prioritisation in allocating, and gas pricing.”

This would be the first time that the Energy Coordination Committee would discuss the prioritisation of gas and its pricing, sources said.

Members of the high-powered meeting chaired by Prime Minister Manmohan Singh, include Finance Minister P Chidambaram, Petroleum Minister Murli Deora, Fertiliser Minister Ram Vilas Paswan, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, and Chairman of the Prime Minister’s Economic Advisory Council C Rangarajan.

In an earlier letter to the petroleum ministry, the PMO has indicated that the fertilizer industry should get priority in allocation of gas and the power sector should be encouraged to rely more on coal for new capacity.

However, JS Sharma, secretary in the Ministry of Chemicals and Fertilisers, said gas pricing for fertiliser companies should be decided by the Committee of Secretaries and not by individual fertilizer units. “Fertiliser companies have sought guidance from the department in this matter and have expressed their apprehensions on the terms for the supply of gas and the pricing formula forwarded by Reliance Industries,” he has written to Petroleum Secretary MS Srinivasan.

Reliance Industries has invited price quotes from five fertiliser companies for sale of natural gas from its find in the Krishna-Godavari Basin. In its invitation Reliance Industries has set out terms of supply, which is expected to begin in July 2008, and has provided a pricing formula to the companies on which they have to convey their acceptance.

“The supply of Reliance gas to the fertiliser industry is necessary to meet the present shortfall and also rising future requirements. Your may, therefore, like to take up the issue with Reliance Industries to ensure that adequate allocation of gas is made for the fertiliser sector.” Sharma said in his letter to Srinivasan.