India may raise natural gas price for state explorers
Sunday, 6 September 2009
NEW DELHI, Sept. 5 (Bloomberg): India may increase the price of natural gas extracted from fields awarded to state explorers by 44 per cent, easing revenue losses for Oil & Natural Gas Corp., the country's biggest energy producer.
A proposal to price the gas at $2.6 per million British thermal units from $1.8 per mBtu currently will be submitted to the cabinet soon, V.L.V.S.S. Subba Rao, joint adviser of finance in the oil ministry, told reporters in New Delhi today. The price, effective April 1, 2009, is linked to India's wholesale price index, he said.
Higher gas prices will benefit ONGC and smaller state rival Oil India Ltd., which sell the fuel at prices controlled by the government to help curb inflation. ONGC may have lost 30 billion rupees ($614 million) selling natural gas below production costs in the year ended March 31, Chairman and Managing Director R.S. Sharma said June 11.
ONGC shares climbed 3.3 per cent, the most since Aug. 14, to 1,178.20 rupees in Mumbai trading compared with a 1.9 per cent gain in the benchmark Sensitive Index.
The explorer produced 22.5 billion cubic meters, or 60 per cent of India's output of gas, in the year ended March 31, according to the Oil Ministry's Web site. ONGC sells around 56 million cubic meters of gas a day from fields awarded by the government before 1999, when India started auctioning them, according to D.K. Sarraf, director of finance.
India's output of natural gas increased about 35.5 per cent to 3.76 billion cubic meters in July from a year earlier, according to oil ministry data.
A proposal to price the gas at $2.6 per million British thermal units from $1.8 per mBtu currently will be submitted to the cabinet soon, V.L.V.S.S. Subba Rao, joint adviser of finance in the oil ministry, told reporters in New Delhi today. The price, effective April 1, 2009, is linked to India's wholesale price index, he said.
Higher gas prices will benefit ONGC and smaller state rival Oil India Ltd., which sell the fuel at prices controlled by the government to help curb inflation. ONGC may have lost 30 billion rupees ($614 million) selling natural gas below production costs in the year ended March 31, Chairman and Managing Director R.S. Sharma said June 11.
ONGC shares climbed 3.3 per cent, the most since Aug. 14, to 1,178.20 rupees in Mumbai trading compared with a 1.9 per cent gain in the benchmark Sensitive Index.
The explorer produced 22.5 billion cubic meters, or 60 per cent of India's output of gas, in the year ended March 31, according to the Oil Ministry's Web site. ONGC sells around 56 million cubic meters of gas a day from fields awarded by the government before 1999, when India started auctioning them, according to D.K. Sarraf, director of finance.
India's output of natural gas increased about 35.5 per cent to 3.76 billion cubic meters in July from a year earlier, according to oil ministry data.