The Empowered Group of Ministers (EGoM) on gas will have to take a call on several issues when it meets on Friday. Among them are: giving continued priority to fertiliser and power sectors in gas allocation,fixing the proportion of fuel supply to non-core sectors like steel,and deciding on the recommendations of Saumitra Chaudhuri committee report on pooling of gas prices.
Given the falling gas output from Reliances KG-D6 fields,the EGoM would consider the petroleum ministrys proposal curb gas supplies to power producers who are selling electricity at unregulated tariff.
The oil ministry has also proposed making future gas allocations to only urea plants and stopping supplies to phosphates and potassium fertiliser manufacturing units.
The EGoM has been told that output from the KG-D6 fields has dipped to about 35 mmscmd per day after touching a peak of 60 mmcmd in March 2010,which has led the ministry to recommend changes in the allocation mechanism. The inter-ministerial panel has also to decide whether power and fertiliser sectors should be allocated the feedstock fuel at the current rate or otherwise.
It would also discuss threadbare the report of Planning Commission member Saumitra Chaudhuri-led inter-ministerial committee constituted to examine pooling of natural gas prices and evolve guidelines.
The committee has recommended that both power and fertiliser sectors be given priority in allocation of domestic gas,which is cheaper than imported gas and recommended that their respective allocations be kept at their adjusted June 2011 drawals of 56.37 mmscmd and 32 mmscmd.
The panel has also opposed pooling mechanism for natural gas at the overall level,nor has it favoured a price pooling on sectoral basis unless it is indispensable. It has also recommended doing away with the 5 per cent custom duty on imports of Regassified LNG.
* The EGoM will have to decide whether power and fertiliser sectors should be allocated gas at the prevailing rate or otherwise
* The other issue coming up for a decision is fixing the proportion of gas supplies from the KG-D6 fields to non-core sectors such as steel