Govt rejects RIL’s KG gas price hike plea

Indian authorities have rejected Reliance’s plea for a 50% rise in the price of natural gas produced from new discoveries at its KG-D6 block.

The satellite fields and another discovery in the block have the potential to produce 24 mmscmd and the company had proposed a price of $6 per unit to make its satellite discoveries viable.

However, the government’s argument was that a price of $4.2 per unit was fixed up to 2014, making it difficult to accept a new rate.

The government, in September 2007, had fixed the price of KG-D6 gas at $4.2 per unit for five years from the date of commencement of supply. RIL commenced gas production from D6 on April 2, 2009.