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Power, CNG, urea rates set to rise New Delhi, June 27 This will be the first revision in gas prices in 3 years. The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh approved Oil Ministry’s proposal to price the domestically produced natural gas as per a complex formula suggested by a panel headed by Prime Minister’s economic adviser C Rangarajan. Stock prices of ONGC and RIL had surged today by 3-4 per cent in anticipation of the decision. The new price will apply uniformly to all producers, be it state-owned firms like Oil and Natural Gas Corporation (ONGC) or the private sector Reliance Industries. While it was previously said the new rates would apply to regulated or Administered Price Mechanism (APM) gas produced by firms like the ONGC immediately, the pricing as per Rangarajan formula will come into effect from April 1, 2014, just when RIL’s KGD6 formula of $4.2 per mmBtu runs out.The Rangarajan formula would be applicable for five years.
While RIL’s KG-D6 gas price was fixed in 2007 at $4.205 per mmBtu for first five years of production, APM gas rates were last revised in June 2010 when prices were raised to $4.2 from $1.79. The RIL began production from its eastern offshore KG-D6 field in April 2009.
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