Cabinet nod for new gas pricing; exploration regime liberalised
The government announced sweeping market-friendly reforms that usher in a new oil exploration regime unshackling the sector from intricate controls, allow a higher price of gas for new deep-sea fields and tweak the mining law to speed up the takeover of companies that have captive mines.
The decisions, taken by the Cabinet Committee on Economic Affairs on Thursday, will make idle reserves worth Rs 1.8 lakh crore in challenging terrain such as the deep sea commercially viable and boost India’s gas output by nearly 40% as companies like Reliance Industries and ONGC will be able to make heavy-duty investments once they are allowed to charge a much higher price for gas.
Natural gas from fields in other areas will continue to be priced on the basis of the existing formula while those in difficult areas will be priced on the basis of the cost of alternative fuels. “It’s a golden day for the industry. So many important decisions have been taken. Now it is for the industry to respond. I am sure the industry will respond.