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May 18, 2012. The law ministry sees no legal hurdle in raising the price of gas produced from Reliance Industries' D6 block, but the oil ministry is expected to oppose the move and is focusing its attention on the gas pipeline from Turkmenistan, which the cabinet approved. Government said the decision would be taken by the Empowered Group of Ministers (EGoM) based on the advice of the attorney general and views of the ministers. The oil minister, Jaipal Reddy, was likely to oppose the proposal to raise prices despite the legal advice from Attorney General Goolam Vahanvati. The oil ministry says that an EGoM decision had approved the current price of $4.2 per unit until 2014 and prices cannot be raised before that. It is also concerned that higher prices would increase subsidy. But Reliance is seeking market-linked prices, which it has argued is prescribed in its production sharing contract (PSC) and is necessary to make new fields commercially viable. The EGoM is expected to meet again to take a decision.
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