Govt plans to raise APM gas price by 44%

Petroleum Ministry has proposed a 44 per cent hike in the price of natural gas produced by ONGC and Oil India and indexing it to inflation rate to help the two cut losses on selling fuel below cost.

“We have circulated a draft Cabinet note for raising prices of natural gas under administered pricing mechanism (APM) and inputs have already come from ministries of power and fertiliser,” Ministry of Petroleum and Natural Gas Joint Advisor (finance) V L V S S Subba Rao said.

APM or the gas produced from fields given to ONGC and OIL on nomination basis,prices are proposed to be raised to “USD 2.6 per million British thermal unit as against about USD 1.8 per mmBtu currently,” he said.

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Petroleum Ministry,he said,will soon approach the Finance Ministry for comments on the issue before moving a formal Cabinet note for consideration of the Cabinet Committee on Economic Affairs (CCEA).

The draft note proposes raising gas price for ONGC to Rs 3,765 per thousand cubic meters from current Rs 3,200 per thousand cubic metre.

For OIL,the gas price has been proposed at Rs 4,205 per thousand cubic metres. The price would change by Rs 55 per thousand cubic metre for every 10 points change in Wholesale Price Index (WPI).

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