ONGC requests Government to Increase Gas Prices
ONGC seeks an increase in the Gas prices and has requested the Congress Government to re-think on gas pricing. ONGC has requested an increase of nearly 50 per cent from the current price finalised by the Government. ONGC expects to get the market value of Gas and doesn't want Government to offer any subsidy on Natural Gas.
ONGC Chairman Mr. R S Sharma said, “We are hoping price of Administered Price Mechanism (APM) gas will be raised to Rs 4.5 per cubic metre or $ 2.5 per million British thermal unit (mBtu) from Rs 3.2 per cubic metre or $ 1.97 per mBtu.”
The decision was taken in 14th AGM of ONGC. Gas under the APM system is supplied to power and fertiliser companies. ONGC is a very profitable Public Sector Unit which offers latest technology for Oil and Natural Gas exploration to many countries. ONGC has also found Gas reserves at many locations. The change in gas prices will boost the company top-line with big margins. Indian Energy major Reliance has been permitted to sell its gas at a higher price.
ONGC Chairman insisted that the market prices are much higher. Even if the price is increased as per their current recommendations, it will be lower than its market value. Mr. Sharma said, “We hope we will get a fair deal as the Reliance Industries Ltd (RIL) issue has been resolved, and we expect the Government to soon take a decision on this. ONGC is hoping to get the market price for new gas produced.”
If the Congress Government decision favors ONGC, the PSU will earn an extra Rs 2,000 crore per year in revenues.