Plan panel to set up body for uniform gas price

New Delhi: In an effort to make prices uniform for consumers, the oil ministry has asked the Planning Commission to set up a committee to suggest a mechanism for averaging out price of costlier imported LNG with cheaper domestic gas, reports PTI.

"We have suggested to the Planning Commission that a committee be formed on 'Pooled Pricing' of gas," oil secretary S Sundareshan said at a Federation of Indian Chambers of Commerce and Industry (FICCI) conference here.

He said the panel may be headed by advisor (energy), Planning Commission and may include chairman, Gail (India) Ltd; managing director and CEO, Petronet LNG Ltd; secretary, Petroleum and Natural Gas Regulatory Board (PNGRB) and director finance, Oil and Natural Gas Corporation (ONGC).

A pooled price or averaging out of difference rates, for natural gas may be necessary in view of the limited domestic gas availability and increasing reliance on imported liquefied natural gas (LNG) to feed the demand.

The oil ministry had earlier commissioned a study by Spanish consultant Mercados International on the feasibility of pooling of over a dozen different rates at which natural gas produced from different fields in the country is sold.

The price for domestic natural gas ranges from $2.71 to $5.73 per million British thermal unit (mmBtu), while LNG on long term contract is currently imported at $6.92 per mmBtu and from spot market at close to $8.52 per mmBtu.

Mercados has suggested separate pools for fertiliser and power sector and involved several complex inter-ministerial issues.

Mr Sundareshan said the Planning Commission has been requesting an inter-ministerial committee under the chairmanship of its advisor (energy), to formulate a policy for pooling of natural gas prices and devise pool operating guidelines to make the policy operational.

Others in the committee could be representatives of the ministry of petroleum and natural gas, power, fertiliser and finance at the level of the additional secretary.

The need for pooling of domestic gas price with imported LNG has arisen because LNG from Australia will cost almost $14 per mmBtu when it lands at Kochi in Kerala in 2014.

"It will be unreasonable to expect consumers to pay (such a price)," Mr Sundareshan said.

Petronet LNG Ltd, India's largest importer of liquefied natural gas, has contracted 1.5 million tonnes a year of LNG from Australia for delivery at its under-construction Kochi terminal in Kerala from end 2014.

The natural gas produced by state-owned ONGC and Reliance Industries, which together account for over 80% of gas in the country, is priced at $4.2 per mmBtu.

The modalities of pooling will be worked out in 6-8 months, he added.

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RBI cautions against money schemes by unauthorised finance companies

Mumbai: The Reserve Bank of India (RBI) today cautioned people against money schemes offering assured high returns and asked them not to have deposits with unauthorised non-banking finance companies (NBFCs) that falsely claim to have approval from the central bank to conduct business, reports PTI.

It said all complaints on unauthorised acceptance and running of money circulation schemes should be referred to the economic offences wing of the concerned state governments.

"It was reported that some individuals, firms, unincorporated association of individuals (unincorporated bodies) or marketing companies and companies engaged in money circulation schemes have been collecting money from the public by making tall promises of high returns, either through issue of advertisements or by sale of products," the RBI said.

It said in a statement that many such entities have vanished without repaying the money collected by them.

"Money circulation schemes are banned under the Prize Chit and Money Circulation Schemes (Banning) Act, 1978 and the respective state governments have the power to take action against the persons involved in such schemes," RBI said.

The central bank has already published a list of over 300 NBFCs across the country which can accept deposits.

"No NBFC outside of this list can accept deposits from public. Doing so is clearly fraudulent and has to be investigated by the law enforcement agencies in the normal course," the RBI said.

The apex bank has been issuing advertisement from time to time cautioning the public about such fraudulent practices, it added.

NBFCs are also in the same operations as banks, although with some differences. Unlike banks, NBFCs cannot accept demand deposits or issue cheques.

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