Calcutta Telegraph: Confusion over price of methane

The pricing of natural gas is becoming complicated with the oil ministry stating that the producers of coal bed methane (CBM) will not be automatically eligible for the new rate effective from April.

The oil ministry is expected to come out with the new gas price this week based on the Rangarajan Committee formula. However, there is little clarity on the companies that will benefit from the new price, which is likely to be around $8 per million British thermal unit (mBtu), as the ministry is treading cautiously with the issue getting politicised and the Opposition making it a major electoral plank.

“There will not be an automatic increase in the price of CBM gas after the new gas pricing notification comes into effect from April 1. The government’s permission will be required before the price is allowed to be raised,” a senior oil ministry official said.

The ministry clarified the government’s stand when Essar Energy, the producer of methane from Raniganj (East) block, sought its opinion on implementing the new pricing regime from the next fiscal. MORE

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