CBM pricing row

Vol 15, PW 18 (22 Mar 12) News in Brief
     

BJP-ruled Madhya Pradesh has lashed out at the Congress-led central government’s CBM pricing policy.

Madhya Pradesh wants customers to pay LNG-linked prices for 3.5m cm/d of CBM, which Reliance plans to produce 2015 onwards from its 495-sq km Sohagpur East and 500-sq km Sohagpur West blocks. State energy minister Rajendra Shukla wrote to oil minister Jaipal Reddy on March 1, expressing concern over recent CBM pricing guidelines.

“CBM ‘price discovery’ is to be carried out in a limited way and only for priority sector customers identified by you,” wrote Shukla. “This will artificially restrict competition and suppress prices, which may lower legitimate (royalty) revenues to the state.

” He asked the ministry to “re-examine” CBM pricing after consulting Madhya Pradesh. “CBM should be sold at market driven prices.

” Ministry officials received on February 21 the results of Reliance’s Sohagpur CBM price discovery exercise where 70 companies participated.