India's state-owned explorer Oil & Natural Gas Corporation has demanded a higher gas price from the government to achieve a break-even point at its proposed offshore gas development projects, off the country's east coast.
ONGC has pitched for a higher remunerative gas price of $6 per million British thermal units (Btu) to $7.15 per million Btu for the envisaged gas production from its Krishna Godavari basin deep-water Block KG-DWN-98/2, the Press Trust of India reported.
ONGC has made a submission to a four-member panel of secretaries working out a new gas pricing mechanism in India, claiming that its cost of gas production worked out to be $4.43 per million Btu during the previous financial year, 2013-2014.
ONGC has asserted that its cost of production exceeds the existing price of $4.2 per million Btu, which mandates for a higher gas price.
The state-owned explorer has claimed that it requires a higher gas price for new fields and raising output from the matured and ageing fields, as higher capital outlays are required, the PTI report added.
For the ultra-deepwater UD-1 discovery in southern part of the Krishna Godavari basin Block KG-DWN-98/2, ONGC has demanded a gas price of $7.15 per million Btu.
The Rangarajan committee had earlier suggested doubling of gas prices in India to over $8 per million Btu, starting April this-year.
However, the Indian government has deferred the hike in gas prices on a few occasions, in-spite of notifying a new pricing guideline earlier this year.
The new Bharatiya Janata Party (BJP) government led by Prime Minister Narendra Modi is now working on a new gas pricing mechanism and prices gas are likely to be increased by next-month.