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The Tariff Commission has proposed that ONGC be paid Rs3,875 per thousand cubic metres for the gas it produces while Rs4,315 per thousand cubic metres would be paid to OIL. Consumer prices would be 10% higher than these figures
The Indian government may soon raise prices of natural gas produced by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) by as much as 30%, petroleum secretary S Sundareshan said on Monday, reports PTI.
"I am told by the petroleum minister (Murli Deora) that the issue is in the final stages of decision-making in the government. We expect a decision soon," he told reporters on the sidelines of the 6th Asia Gas Partnership Summit at New Delhi.
Price of gas produced by ONGC and OIL from fields given to them on nomination basis were last revised in 2005. Current rates of Rs3,200 per thousand cubic metres ($1.79 per metric million British thermal unit [mmBtu]) are less than half of the $4.2 per mmBtu price of gas from KG-D6 field of Reliance Industries.
The oil ministry has circulated a Cabinet note for hiking price of gas under administered pricing mechanism (APM) to Rs4,142 per thousand cubic meters ($2.32 per mmBtu).
The price of gas under APM is proposed to be raised in stages to Rs7,500 per thousand cubic metres or $4.2 per mmBtu by 2013.
Mr Sundareshan said that the government was weighing policy options to end differential pricing of natural gas that ranges from under $1 per mmBtu (APM gas) to $5.73 per mmBtu (for gas produced by the BG Group-operated Panna/Mukta and Tapti fields).
"Over the next few months, we will explore further how to make all parts of the country get gas at approximately the same price," Mr Sundareshan said, indicating that prices of gas from different sources may be pooled or averaged out to make it uniform for consumers.
Under pooling of prices, producers will get the price as per the production-sharing contract between them and the government. But consumer prices will be uniform irrespective of the source of gas.
Sources said the note on APM gas price increase was based on the recommendation of the Tariff Commission, which proposed that ONGC be paid Rs3,875 per thousand cubic metres for the gas it produces while Rs4,315 would be paid to OIL. Consumer price would be 10% higher than this.
About 40% of the nation's 140 million standard cubic metres a day of gas output is sold at administered rate. A hike in rates of these is an attempt to reduce distortions in a market with more than a dozen prices.
The government has set $4.2 per mmBtu as the sale price of gas from Reliance Industries' eastern offshore KG-D6 fields, while the gas from the BG Group-operated Panna/Mukta and Tapti fields is sold at $5.73 per mmBtu.
State-run ONGC lost a whopping Rs4,745 crore in revenues on selling 17.71 billion cubic metres of natural gas at a rate below production cost in 2008-09.
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The recent global financial crisis has raised the question whether lack of financial knowledge led individuals to take out adjustable rate mortgages or incur credit card debts they could not afford, says the finance minister
Finance minister Pranab Mukherjee on Monday said that financial understanding has assumed greater importance in the wake of the global crisis, which was triggered by complex products that people invested in without realising the risks, reports PTI.
"Today, financial competence has become more essential, as financial markets offer more complex choices," Mr Mukherjee said at a workshop on financial literacy.
The workshop was jointly organised by the Reserve Bank of India (RBI) and the Organisation for Economic Cooperation and Development (OECD).
"In fact, the recent global financial crisis has raised the question whether lack of financial knowledge led individuals to take out adjustable rate mortgages or incur credit card debts they could not afford," Mr Mukherjee said.
While policies are in place that enable access to many financial services, he said, "the responsibility for saving and investing for the future primarily lies with the individual."
The finance minister said that research shows that there is a strong link between one's knowledge of economics and the financial decisions related to savings, borrowings, retirement planning or portfolio choice that one makes.
Policy initiatives seeking to provide greater access to financial services to a large segment of the population would require filling the existing knowledge gap in financial education, he said.
Over the last decade or so, researchers across the world, mainly in developed countries, have started to study and explore whether individuals are well-equipped to take financial decisions, Mr Mukherjee said.
"(The) OECD report on financial literacy in the year 2005 has documented low levels of financial literacy in several countries," he added.