subsidy

Is $4.2 per mmbtu a functional price? latitude does it

Is $4.2 per mmbtu a functional price? latitude does it reaction in the tout? In view of this, it becomes due to strike position the gas price of $4.2 consistent with mmbtu stands repercussion indian and global market. KG D-6 gas price is for long-term and does not get impacted significantly due to vend forces. Price of $4.2 per mmbtu cheaper than nearly all the domestic gas prices except for APM gas:For a cute assessment, the price of $4.2 per mmbtu needs to be compared with prices of domestic fuel from various fields. In the country, price of gas is lowest at $1.8 per mmbtu over APM fields operated through state-run ONGC and OIL. Lately, ONGC further OIL has demanded the APM fuel prices to be raised to $4.2 per mmbtu. However, media report indicates that Government has agreed to a price hike of 44% or $2.6 in line with mmbtu. The 2d lowest gasoline cost of $3.5 in line with mmbtu is for Ravva field operated by Cairn, which is up considering revision from December, 2008. Bearing in theory the go over of gas drag the country and market trend, revised gas price since Ravva field would not be less than $5 per mmbtu, higher than KG D6 price.

Gas cost for an alternative cairn operated box Ravva Satellite is already better than KG D6 gas at $4.5 per mmbtu again is set since review along screen Ravva. If media reports are to be believed, GAIL, the huckster of Ravva Satellite gas, had offered the price of $5.73 per mmbtu as soon as the cost became due because revision, only to be lonesome by the operator. Latest media reports imply that Cairn has demanded the price of $6.75 per mmbtu from GAIL based on the price offered from an industrial unit. The demanded price is being 60% higher compared to KG D6 price.Henry Hub gas price ranged between $5-8 according to mmbtu all through last five years, which is considerably above the $4.2 per mmbtu price:Globally, gasoline prices at speechmaker Hub in Louisiana are considered as the benchmark. Price trend being past five years (from 2004 to 2009) at Henry Hub indicates that gas expenses have greatly ranged between $5 per mmbtu to $8 per mmbtu during 2004-09. Gas prices crack upgrowth sharply larger $13 according to mmbtu in 2005 but eventually set in the align of $5-8 in line with mmbtu. Gas prices at Henry Hub again surged to almost $15 per mmbtu in 2008 on account of spiraling oil prices also bulky gas demand, however crashed below $5 consistent with mmbtu in 2009 becoming to unprecedented recession in US market that resulted force gas prices declining well below $5 consistent with mmbtu. since the US was in recession and anticipated to come out of the same, the energy demand ultimately will also find the without northward trend. The will in due course deliver the gas charges back to the range $5-8 per mmbtu. Compared to the Henry hub price range of $5-8 per mmbtu, KG D6 price of $4.2 according to mmbtu for five elderliness seems very competitive and absolutely substantially lower. Hence, the $4.2 consistent with mmbtu gas price stands relevant commensurate by global standards.

All alternative fuel prices multiple times higher than that of $4.2 in keeping with mmbtu barring domestic coal:Prices of four major petroleum products namely Petrol, Diesel, Kerosene and Domestic LPG is regulated by the Government and modified mastery better public interest. Retail price of Rs. 48.76 per litre of Petrol domination Mumbai (Rs. 4.69 per litre cheaper than the actual cost) corresponds to $23.27 per mmbtu owing to the calorific cost of Petrol at 11,000 kcal per litre. Addition of Rs. 4.69 per litre courtesy provided by the Government increases it to $25.51 per litre. Similarly, diesel price of Rs. 36.7 per litre (Rs. 3.09 cheaper than the actual price) with calorific value of 9800 kcal per litre translates to $19.66 per mmbtu. If the subsidy of Rs. 3.09 per litre is added into this, the price in energy terms increases to $21.32 per mmbtu.Prices of all these petroleum products, with or off-course limitation subsidies, are beyond the KG D6 gas price of $4.2 per mmbtu. after among all, is the subsidized price of Kerosene at $4.98 per mmbtu which is precisely over $4.2 per mmbtu price. Exclusion of subsidy from the Kerosene price makes it in that three times than that of KG D6 gas price. KG D-6 fuel – extremely Realistic again Competitive fuel price in the market: Finally, the gas price of $4.2 per mmbtu appear not solitary uncommonly competitive and comparable to domestic gas fees and RLNG, but also reduce than average price of gas in international doorstep. The price is also significantly lower than other substitute fuels in the domestic market. Undoubtedly, the Empowered group of Ministers seems to have worked thoroughly to make the KG D6 price realistic and appropriate. Therefore, the seeds of doubts being raised by way of Anil Ambani company about the KG D6 gas price appear irrelevant and have grown from personal animosity.

Oil & Gas from the KG – D6 project of Reliance, the largest discovery mark recent times and another feather connections the cap whereas Mukesh Ambani managed Reliance Industries which is India’s largest and emphatically successful private unit conglomerate marred only by the Reliance Gas Dispute. RIL, however, has proven these accusations erroneous time and again.

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