The government proposes to withdraw priority in gas allocation to power plants, a major setback to the already stressed power sector and country’s top power producer NTPC.
The proposal floated by the ministry of petroleum and natural gas seeks dismantling the existing pricing for domestic gas and replace it with a market based discovery mechanism on a gas exchange by pooling the local fuel with LNG, sources said.
A senior government official said the oil ministry has floated a cabinet note proposing the new price discovery mechanism and has removed power plants from the priority allocation list. The other two sectors- city gas distribution and fertiliser – are proposed to be kept on the list.
“The power ministry has vehemently opposed the proposal saying power is a regulated sector and needs domestic gas allocation more than any other sector,” said the official. Read More
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