The recent hike in gas prices could unlock about three billion cubit feet of natural gas reserves.
These reserves are currently lying untapped due to the current gas price of $4.20 per million British thermal units, said Veerappa Moily, Minister for Petroleum and Natural Gas.
He was addressing the media on the sidelines of an oil and gas convention organised by India-Tech Foundation on Friday.
The recent decision of the Petroleum Ministry to increase gas price has not gone well among sections of the industry and civil society. The Communist Party of India MP Gurudas Dasgupta, along with former Union Power Secretary E.A.S. Sarma, has filed a public interest litigation in the Supreme Court, seeking a rethink on the Government’s decision, which is based on the Rangarajan committee’s recommendation.
Moily said due to the increase in gas price, new hydrocarbon blocks in Tripura and Cauvery basin will become commercially viable. Even the Directorate General of Hydrocarbons has said that a price of more than $4.2 per million British thermal unit (mBtu) was required to make some of the gas discoveries commercially viable.
“If we don’t increase gas prices, then global oil companies with advanced technologies will not come to India for oil exploration. The country will come to a grinding halt due to lack of energy resources. Either we increase the domestic gas prices or import gas at $18 per mBtu, such is the situation,” Moily said.
He said that the Government cannot afford to take timid decisions for the petroleum sector. It cannot be intimidated by the ghosts of the 2G scam, Central Bureau of Investigation and CAG, while taking decisions, he said.
On Gurudas Dasgupta approaching the court with a PIL, Moily said that, “He has a right to approach the court as a citizen and as a parliamentarian. We are happy to face the court. All the decisions have been taken in a transparent manner,” he said.
Rupee deprecation
He added that every Re 1 decline against the dollar, costs the Indian oil marketing companies Rs 9,000 crore.
The earlier decision to allow these companies to increase diesel prices every month by 50 paise will remain in force. The Ministry has no fresh plans to increase the diesel prices.