December 02, 2008

Steel ministry calls for gas supply priority for steel sector

It is reported that union ministry of steel has expressed concerns over the lack of gas supplies committed to steel companies for setting up gas based plants and has sought intervention to include its requirement in the list of priority industries. As per reports, steel ministry has requested that the quantity committed at the initial stages of setting up the gas based steel plants, must be given.

As per current policy, priority is given to power, fertilizer and transportation sectors over other industries. As per the petroleum ministry, all available administered price mechanism gas from Oil and Natural Gas Corporation and Oil India Limited would be supplied to the power and fertilizer sector against their existing allocations after meeting the requirement of specific end users committed under court orders.

The total availability of administered price mechanism gas from ONGC and OIL is 55 million standard cubic meters per day, whereas the total supply to the power and fertilizer sector is about 49 million standard cubic meters per day. The remaining 6 million standard cubic meters per day would meet the requirement of consumers covered under court orders and the small scale category.

There is no more administered price mechanism gas available for new consumers including city gas distribution. Any additional gas and future production of gas from new fields to be developed in future by ONGC and OIL will be sold in accordance with the production sharing provisions.