Petroleum and Natural Gas Minister M. Veerappa Moily on Thursday said there would be no going back on CCEA’s decision on gas pricing.

Despite Moily’s assertion, this may not be the end of the story.

After all, it is not everyday that the Finance Ministry sends an ‘office memorandum’ to the Petroleum Ministry, based on opinions expressed by the media, asking it examine the matter.

On July 4, the Finance Ministry wrote to the Petroleum Ministry pointing out that Reliance Industries Ltd (RIL), which would benefit from higher gas prices, should be asked to sell unmet gas supply commitments from its East Coast fields at the current rate of $4.2 a unit (gas is measured in million British thermal units).

Addressing the media here on Thursday, Moily said there would be no distinction between companies as far as gas pricing was concerned. “There is no thinking in the Government for any review or reconsideration of the decision of the CCEA,” he stressed.

The Finance Ministry’s letter has created a flutter because on the one side is, among producers, is Mukesh Ambani’s RIL, and on the other, among the consumers, is Anil Ambani’s Reliance Power.

Incidentally, the Finance Ministry has been one of the key Ministries pitching for higher prices for domestically produced natural gas.

Thus, the question being asked is: Why should the Finance Ministry, which has been part of the entire decision-making process, pick up editorials criticising the move, and seek re-examination?

Officials in the Oil Ministry have no answers except stating that “this was not the Finance Ministry’s views but opinions expressed in media”.

Critics feel this has more to do with politics, as the Government does not want to be seen aligning with any single corporate house prior to the 2014 general elections. Besides, the Comptroller & Auditor General is also watching.

Moily said the new gas regime would be effective April 2014.

The new price is proposed to be fixed for five years and will apply to all producers and consumers uniformly.

On whether the Ministry will look into the Finance Ministry’s suggestion for putting a cap on gas pricing, Moily said that the CCEA’s decision would be followed. The CCEA has not put any cap on gas pricing.

However, the Finance Ministry’s letter suggested that “there must be a ceiling price under the formula. It cannot be that the producers will reap unlimited gains in case of an upswing in global prices, any upside has to be capped.”

Asked if the Oil Ministry would respond to the Finance Ministry’s queries, a senior official said “we would be responding to the information sought.”

The Finance Ministry also wanted information on the production sharing contracts of blocks of private contractors where gas was being produced, the steps taken by block management committees to supervise technical parameters of various fields and cost recovery, year-wise approvals and annual plan of RIL-operated KG D6 block, the latest status on the Rangarajan panel’s recommendations on production sharing contracts.

richa.mishra@thehindu.co.in