Gasoline worth for ONGC to drop to $ 1.82, drop under $ 4 for Reliance-BP, Vitality Information, ET EnergyWorld
Tariffs paid for gasoline produced from fields donated to Oil and Pure Gasoline Company (ONGC) and Oil India Ltd (OIL) are almost definitely to extend to $ 1.82 per million UK thermal unit for a six-month interval starting April 1 from a ten-year low. presently $ 1.79, stated two folks with information of the matter.
On the similar time, the worth of gasoline produced from tough fields reminiscent of deep water, which relies on a distinct system, is anticipated to fall under $ 4 per mmBtu from the present worth of $ 4.06.
That is the utmost worth to which Reliance Industries Ltd and its associate BP plc are entitled for the gasoline they produced from deep water blocks they received beneath the brand new exploration license coverage. (NELP).
Whereas the federal government fixes the worth of gasoline produced by CGSB from the fields allotted to it on a nomination foundation, it declares twice a yr a cap or most worth that may be obtained by operators who’ve gained an space of land. exploration throughout the framework of the NELP.
Operators are purported to make market worth discovery by researching presents from customers, however that charge is topic to the worth cap introduced by the federal government, they stated.
Reliance-BP had not too long ago found costs for brand new gasoline from its Krishna Godavari Basin block, had gotten tariffs above $ 6 per mmBtu, however they might get lower than $ 4 beneath the pricing system.
The worth of pure gasoline is ready each six months – on April 1 and October 1 – annually primarily based on the tariffs in power in surplus international locations reminiscent of america, Canada and Russia.
Within the final revision, the worth was lowered by 25 p.c to $ 1.79 per mmBtu for six months beginning October 1 from $ 2.39. That is the third consecutive charge discount in a yr. The worth was lowered 26 p.c to $ 2.39 in April of final yr.
The speed paid to producers of recent gasoline from tough fields reminiscent of deep water has been lowered to $ 4.06 per mmBtu from $ 5.61.
The October 1 charge is equal to the worth paid to ONGC and Oil India Ltd (OIL) earlier than Could 2020, when formula-based pricing was first launched.
In keeping with sources, ONGC recorded a lack of Rs 4,272 crore on gasoline actions in 2017-18, which is anticipated to succeed in over Rs 6,000 crore within the present fiscal yr (April 2020 to March 2021), stated. they acknowledged.
ONGC suffered losses on the usual 65 million cubic meters per day of gasoline it produces from nationwide fields shortly after the federal government in November 2014 launched a brand new gasoline pricing system that had “limitations. inherent ”as a result of it was primarily based on gasoline surplus pricing hubs. international locations like america, Canada and Russia.
In keeping with sources, ONGC, in a latest authorities assertion, stated the break-even worth for producing gasoline from new discoveries was within the vary of $ 5-9 per mmBtu.
In Could 2010, the federal government raised the gasoline gross sales charge to utilities and fertilizers from $ 1.79 per mmBtu to $ 4.20. ONGC and OIL bought a worth of $ 3.818 per mmBtu for the gasoline they produced from the fields they got on proposal and after including a ten% royalty the gasoline price $ 4.20 per mmBtu for customers.
The Congress-led UPA had accredited a brand new pricing system for implementation in 2014 that might have elevated tariffs, however the BJP-led authorities deserted it and launched a brand new system.
The brand new system takes into consideration the volume-weighted annual common of costs in impact within the Henry Hub (United States), Nationwide Balancing Level (United Kingdom), Alberta (Canada) and Russia with a lag of 1 / 4. Costs are set each six months – April 1 and October 1 of every yr.
The speed on the first overview, utilizing the brand new system, was $ 5.05, however in subsequent semi-annual opinions it continued to say no till it hit $ 2.48 for the interval of April 2017 to September 2017.
Subsequently, it fell to $ 3.69 in April 2019-September 2019 earlier than being lowered by 12.5% in October 2019 to $ 3.23.