Cabinet decisions: Nod to pricing freedom for coal bed methane firms

Cabinet decisions: Nod to pricing freedom for coal bed methane firms

Permits IOC to sell its 24% in Lubrizol India; gives nod to additional 2% DA

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the marketing and pricing freedom
to coal bed methane (CBM) contractors to sell CBM in the domestic market. CBM is a form of natural gas extracted from coal beds. If any buyer is not identified, the contractors can sell the CBM to its any affiliate. Royalty and other dues to the government, however, shall be payable on the basis of Petroleum Planning and Analysis Cell notified prices or selling prices, whichever is higher.

The policy is expected to incentivise the CBM operation in the country. As on March 2016, CBM production from the country’s four blocks stood at 1.64 mmscmd. Around 33 CBM blocks have been awarded in four rounds of CBM bidding, covering 64 per cent of the total available coal bearing area of 26,000 sqkm across 12 states. These blocks are seen to have about 62.4 trillion cubic feet (tcf), out of which, 9.9 tcf had been established as gas-in-place.

The CCEA also permitted Indian Oil to sell its 24 per cent equity in Lubrizol India Pvt Ltd—a manufacturer and supplier of lubricant oil, lube oil, engine oil and chemicals—to the joint venture partner in the firm Lubrizol Corporation of the US. The sale is expected to enable Indian Oil to have long-term association with Lubrizol Corporation and letting the Indian JV to have access to the latest global additive technologies developed by the foreign partner.

The Union Cabinet on Wednesday approved an additional 2 per cent dearness allowance/dearness (DA/DR) relief for 48.85 lakh Central government employees and pensioners with effect from January 1, 2017. The decision would cost the exchequer Rs 6,833.5 crore in 2017-18 (for a period of 14 months from January, 2017 to February, 2018), the government said in a statement. The Cabinet also cleared a Rs 2,147.33-crore project for widening of Handia-Varanasi stretch in Uttar Pradesh, the first highway project approved by the Centre in the state after BJP’s resounding victory in assembly polls. This project has been awarded under the government’s flagship road building programme — National Highways Development Project (NHDP) Phase-V.