EGoM accepts RILs argument for revisiting KG-D6 gas prices

The Empowered Group of Ministers (EGoM) on Gas Pricing has acknowledged Reliance Industries (RIL) argument for reopening the pricing of KG D6 natural gas but has asked the petroleum ministry to submit legal advice for its decision.

Listen to this article

00:00

1x 1.5x 1.8x

The Empowered Group of Ministers (EGoM) on Gas Pricing has acknowledged Reliance Industries (RIL) argument for reopening the pricing of KG D6 natural gas but has asked the petroleum ministry to submit legal advice for its decision. Papers show that though pricing was not listed on the EGoM agenda,it was brought into discussion citing RILs view that India was bleeding foreign exchange by paying high LNG prices while the domestic KG D6 gas was being sold at $4.2 per mBtu.

The EGoM noted that there is a wide divergence between the domestic and international prices of gas and the import of natural gas at a high price to meet the domestic shortfall adversely impacts the current account balance, say the minutes of the February 24 meeting.

The EGoM directed that the advice of Ministry of Law & Justice,including the views of the Attorney General of India,be obtained in the matter of gas price revision for consideration, it adds.

Story continues below this ad

The EGoM,headed by Finance Minister Pranab Mukherjee,had considered a similar appeal in 2010 but had turned it down saying that the gas price was valid for five years until 2014.

Last January,RIL wrote to the ministry and the Prime Ministers Office seeking a price revision,saying that the current price was sub-market compared with three times higher price being paid for imported gas (LNG).

Indirect tax mop up at 89% of BE till Feb

The government is unlikely to meet its indirect tax collection target for 2011-12. Tax receipts from excise duty,service tax and customs have amounted to only 89 per cent of the budget estimates of Rs 3,92,908 crore between April 2011 and February 2012,further adding to the already ballooning fiscal deficit.

Official figures released on Friday revealed that indirect tax collections rose by14.6 per cent in the 11 month period to Rs 3,48,702 crore against Rs 3,04,212 crore in the same period last fiscal. Lower-than-expected realisation of tax receipts is likely to widen the fiscal deficit which was originally pegged at 4.6 per cent of the GDP in 2011-12. But the fiscal deficit has already overshot the target on the back of poor collection of taxes and lesser realisation of disinvestment receipts.

Story continues below this ad

Excise duty collections grew by a mere 1.3 per cent to Rs 12,196 crore in February y-o-y. Customs duty collection also grew at a subdued 5.9 per cent to Rs 12,151 crore in the month of February as against Rs 11,479 crore collected a year ago.