Now, RIL, other producers don’t need govt nod for gas pricing

New Delhi, December 7

Reliance Industries (RIL) and other producers of natural gas will no longer need the government approval for the gas price if it is arrived at using the new guidelines for the discovery of market price, an official order said.

The Ministry of Petroleum and Natural Gas last week notified guidelines for the discovery of market prices for domestically produced natural gas through e-bidding.

The government has since 2017 given pricing freedom for natural gas produced from all fields other than the old fields of state-owned ONGC and Oil India Ltd in nomination blocks.

Firms such as Reliance Industries-BP combine and ONGC (for non-nomination blocks) have been auctioning gas to users. They would typically devise a formula and seek bids from users.

They will continue to devise a pricing formula, but will now have to seek bids on the electronic platform of five pre-selected agencies, the notification said.

The agencies are SBI Capital Markets Ltd, mjunction Services Ltd, RITES, MSTC and CRISIL Risk and Infrastructure Solution Ltd.

This follows the Union Cabinet in October allowing marketing freedom for blocks where pricing freedom already existed. Alongside, it approved standardised bidding for price discovery.

The companies “shall design the tender/bid offer, including the eligibility criteria, bid parameters, evaluation criteria, tender fee, salient terms and conditions of Gas Sales Agreement and any other relevant information etc, with a view to encourage wider participation from prospective buyers, promote competition and maximise the value of natural gas offered,” it said.

ONGC and OIL are also to follow these guidelines for the discovery of the market price of natural gas produced from their fields wherever pricing and marketing freedom has been granted, the order said. — PTI

New e-bidding guidelines

• The Ministry of Petroleum and Natural Gas last week notified guidelines for the discovery of market prices for domestically produced natural gas through e-bidding
• Firms such as RIL-BP combine and ONGC have been auctioning gas to users. They would typically devise a formula and seek bids from users
• They will continue to devise a pricing formula, but will now have to seek bids on the electronic platform of five pre-selected agencies
• The government, however, will have the right to ask for information and intervene if there are reasons to believe that there is a foul play