Move to link gas prices to import parity

By Our Special Correspondent

NEW DELHI, NOV. 13. The Union Petroleum Minister, Mr. Ram Naik, today declared that natural gas prices are likely to more than double after the administered pricing mechanism (APM) is lifted from the oil sector next year. This will be a consequence of a decision taken in principle to link gas prices to 100 per cent import parity.

Speaking to newspersons after a 75 minute meeting with the Finance Minister, Mr. Yashwant Sinha, here, he said it had been decided to link gas prices to import parity. Any changes in natural gas pricing would be carried out, however, only in the next budget. He maintained that a regulatory authority for natural gas would be put in place before the sector is decontrolled.

Mr. Naik said the modalities of linking natural gas prices to international gas prices would be discussed at the next meeting between the two Ministers on November 29. A Cabinet note on the various issues involved would be prepared including the aspect of fertilizer subsidy, he said. He explained that at present natural gas from exploration blocks awarded under the new exploration licensing policy (NELP) and through joint venture route is priced at prevailing international rates while national oil companies like the Oil and Natural Gas Corporation (ONGC) are being paid at a cap of 45 per cent of import parity.

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Section  : Business
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