The Ministerial Panel on Commercial Utilisation of Gas will meet on Wednesday to re-prioritise allocation of domestically produced gas to consumers, such as power and fertiliser units, from Reliance Industries’ KG-D6 block.

With gas output from RIL-operated East Coast KG-D6 block declining and no other gas find going commercial immediately, the panel, headed by Defence Minister, A.K. Antony, has a tough task in hand while reconsidering sectoral priority of the available gas.

The Empowered Group of Ministers is expected to consider whether to accord equal priority to all core sectors – fertiliser, LPG, power and city gas distribution entities (for cooking and transport sector) – or re-distribute the available gas among the users on pro-rata basis (according to calculated share) as per the signed gas supply agreements.

The panel could also consider maintaining status quo or accord equal priority to fertiliser and power sectors.

While the Power Ministry has been making a strong case for considering gas-based power plants as priority sector for allocation, the fertiliser industry wants the status quo to be maintained. Currently, fertiliser is in the priority sector list, while there have been no supplies to power sector since March.

The current output from RIL’s D6 block is less than 15 mmscmd, which is not sufficient to meet even the earlier core sector allocation.

Production from D6 began in April 2009 and reached its peak of 61 mmscmd in March 2010. The priority sectors, including power, were supplied full quantity till the decline in production started from April 2010. To deal with this decline, pro-rata cuts were initially imposed across sectors between July 2010 and March 2011.

With Reliance and its partners unable to control the decline in output from the block, the Ministry for Petroleum & Natural Gas enforced a priority cut in the following order: non-core sector, city gas distributor sector, power, LPG, and fertiliser.

richa.mishra@thehindu.co.in

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