Gas producers might be asked to pay آ‘Profit Gasآ’ in kind

Vol 8, PW 18 (01 Dec 04) News in Brief

Gas producers could soon be asked to pay Profit Gas in kind instead of in cash.

A new proposal under consideration by the oil ministry if accepted would oblige gas producers ONGC, Niko Resources, Gujarat Petroleum, Cairn Energy, British Gas, Reliance and others to pay the governments share of Profit Gas as a percentage of gas supplies in physical form from actual production and not in monetary form. We have asked GAIL and the DGH to help us work out how much volume of Profit Gas can be taken from each gas producing block, a senior official tells us.

When it gets full details, the ministry will set up a team to examine the proposal. The team will most likely recommend an amendment in the model PSC stating that the Profit Gas is supplied to GAIL.

GAIL will then be asked to link development of its national gas grid with its new responsibility as the government-nominated offtaker of Profit Gas.