Date:29/06/2005 URL: http://www.thehindubusinessline.com/2005/06/29/stories/2005062902610400.htm

Back ONGC to net Rs 1,400 cr thanks to hike in gas prices

Pratim Ranjan Bose

Kolkata , June 28

THE recent revision in natural gas price, which was raised to $3.86 per million british thermal unit (mmbtu), will have a positive impact of close to Rs 1,400 crore on ONGC's balance sheet during the remaining months of 2005-06.

Talking to Business Line, Mr R.S. Sharma, Director (finance), said the total impact on profit was estimated to be in the range of Rs 800-900 crore after payment of royalty to joint venture partners and other charges.

The Cabinet Committee on Economic Affairs (CCEA) at its meeting on May 19 had approved the increase in natural gas prices. Gas prices are expected to move further upwards following the decision of the tariff commission, due in January-February 2006.

While ONGC's subsidies for North Eastern States had already been brought down from Rs 250 crore to Rs 150 crore this year, the company will not have to bear any burden on this score beginning next year.

Till this year, ONGC used to supply gas at a special rate of Rs 1,700 per million standard cubic metre a day (mmscmd). The price was considerably lower than the erstwhile administered gas price of Rs 2,850 mmscmd.

According to one estimate, the revised price for the North Eastern states stands at Rs 1,920 per mmscmd.

The administered price of gas, which is primarily consumed by power and fertiliser companies, has also been revised to Rs 3,200 mmscmd.