Natural gas set to go dearer

ONGCThe price of natural gas sold under a regulated regime may be hiked in the next few days, as the Union Petroleum Ministry has been working on a proposal to hike natural gas prices by 14 per cent.

Currently, state-owned oil firms ONGC and Oil India Ltd (OIL) sell gas on a nomination basis under the administrated price mechanism (APM). Public Sector Company, Oil and Natural as Commission, has been under huge pressure for selling gas at government fixed administrative prices, asking for price re-look during the last few months.

Mr. V. L. V. S. S. Subba Rao, the Joint Advisor of Finance in the Petroleum Ministry said: "We have taken inputs from fertilizer and power ministries. The proposal includes an escalation clause linked to wholesale price index."

Union cabinet will soon take up the matter pertaining to the raising of gas prices to $2.6/mBtu from the current $1.8/mBtu.

The Petroleum Ministry will also seek the opinion of the Ministerial Panel looking into the issue for rational hike in gas price. Oil India, currently enjoying a mini-ratna category-1 status, is in the race to acquire Navratna status. Mr. Rao said: "The Company qualifies in every parameter. And once the IPO is over then the proposal would be considered."