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Sunday, May 28, 2023

Government approves Kirit Parikh panel tips about herbal fuel pricing

The Cupboard Committee on Financial Affairs (CCEA) on Thursday licensed the revised home herbal fuel pricing tips for fuel constructed from nomination fields of state-run ONGC and OIL, New Exploration Licensing Coverage (NELP) blocks and pre-NELP blocks, the place Manufacturing Sharing Contract (PSC) supplies for presidency’s approval of costs.

“The cost of such herbal fuel will probably be 10 in keeping with cent of the per 30 days moderate of Indian crude basket and will probably be notified on a per 30 days foundation. For the fuel produced by means of ONGC and Oil India from their nomination blocks, Administered Value Mechanism (APM), worth will probably be matter to a ground and a ceiling,” a central authority remark mentioned.

Fuel constructed from new wells or neatly interventions within the nomination fields of ONGC and OIL, can be allowed a top class of 20 in keeping with cent over the APM worth, it added.

Ground and ceiling worth to move up by means of 25 cents in keeping with yr after two years.

“The brand new tips are meant to make sure a strong pricing regime for home fuel shoppers whilst on the identical time offering ok coverage to manufacturers from antagonistic marketplace fluctuation with incentives for boosting manufacturing,” the federal government mentioned.

Closing yr, the Kirit Parikh committee on truthful pricing of herbal fuel had really useful the fee from outdated fields will likely be fastened at 10 in keeping with cent of the per 30 days moderate of India’s crude oil basket. But even so, this worth will even have a ground of $4 in keeping with mBtu and a ceiling of $6.5 in keeping with mBtu.

The reforms will result in important lower in costs of Piped Herbal Fuel (PNG) for families and Compressed Herbal Fuel (CNG) for shipping. The decreased costs shall additionally decrease the fertilizer subsidy burden and assist the home energy sector, the federal government mentioned.

With the availability of a ground in fuel costs and provision for 20 in keeping with cent top class for brand spanking new wells, this reform will incentivise ONGC and OIL to make further long-term investments within the upstream sector main to larger manufacturing of herbal fuel and consequent aid in import dependence of fossil fuels. The revised pricing tips will even advertise decrease carbon footprint in the course of the expansion of gas-based financial system, it added.

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