Indiaonline: Gas Pricing: The CBM conundrum

The government's recent approval of a hike in domestic natural gas prices from next April next year has thrown up the conundrum of coal bed methane (CBM) gas in the country.

According to India's most successful producer of this gas derived from coal seams, the government's clubbing all natural gas together for pricing is aimed at applying controls on an industry that is already charging market prices allowed by government contracts.

"By saying that the new gas pricing policy applies to all gas, the government is trying to control the CBM industry, whereas as per our contracts we are already charging market determined, that is arm's length, price," Yogendra Modi, chairman and CEO, Great Eastern Energy Corp Ltd (GEECL) told IANS in an interview.

GEECL currently produces around 20 million standard cubic feet (mmcsfd) of gas a day with 144 wells drilled on its Raniganj (South) block in West Bengal. MORE