New Delhi: State-owned oil firms incurred Rs4,745 crore annual losses on pre-revised rates, prompting the government to more than double the price of state administered natural gas to $4.2 per million British thermal units (mmBtu), reports PTI quoting minister of state for petroleum and natural gas Jitin Prasada in the Rajya Sahba.
The cost of production of natural gas for national oil companies has risen since the last increase in 2005, the minister said during Question Hour.
"Oil & Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) incurred Rs4,745 crore of loss on sale of APM (administered priced) gas," he said.
The price was raised from just under $2 per mmBtu to $4.2 per mmBtu to bridge the difference in cost of production and sale price and also to provide level playing field with Reliance Industries (RIL), which sells natural gas from its eastern offshore KG-D6 field at $4.2 per mmBtu, he said.
The hike had necessitated an increase in compressed natural gas (CNG) and piped natural gas (PNG) price in Delhi and Mumbai.
"Following the APM price increase, Indraprastha Gas Ltd, which supplies CNG in and around Delhi, increased its CNG price in Delhi from Rs21.90 per kg to Rs27.50 per kg and Mahanagar Gas Ltd, which supplies CNG in and around Mumbai, increased its CNG price from Rs24.65 per kg to Rs31.47 per kg," he said.
VAT on gas varies from 5% in Delhi to 12.5% in Gujarat to 21% Uttar Pradesh, he said.
Mr Prasada said urea manufacturing units have been given top most priority in allocation of natural gas from KG-D6 fields of Reliance. Fertilizer units have been allocated 15.77 million standard cubic meters per day (mmscmd), power plants 32.677 mmscmd and LPG extraction units 3 mmscmd.
"Demand for gas is greater than supplies," he said.