Ministry blocks RIL’s KG-D6 gas price hike plan

The fertiliser ministry has opposed Reliance Industries' demand for hiking the KG-D6 gas price in line with the Asian LNG spot price, effective from April 2014. The ministry wants the price to be not more than $8/mmBtu.

RIL pitched for the gas price, post March 2014, to be about 10% below the spot price of LNG imported from Qatar — $12-13 at current rates. According to sources, during discussions with the government, the fertiliser ministry contended that such a price (on which consumers will have to pay an extra $1-1.5 to cover transporation charges and marketing margins) is not viable for the fertiliser industry whose output is highly subsidised, adding that any such move will cause a burden on the exchequer.