News Detail

• Andhra Pradesh chief minister Kiran Kumar Reddy has mounted pressure on the Centre to divert gas being supplied to non-priority sector from fields of state-run firms or their joint ventures to private power producers in the state.State government sources told ToI that the chief minister has written to oil minister S Jaipal Reddy saying 1,000 mw generation capacity remains stranded in Andhra due to reduced gas supplies from Reliance Industries Ltd's (RIL) fields off the state's coast. This loss of generation would black out 29 lakh pump sets in the state that would be required to safeguard rabi crop.
• The Centre's ministerial panel on distributing Reliance gas had earmarked supplies to the state's gas-fired units to operate at three quarters of their capacity but were now operating at only half their template, Reddy says.While power production is suffering throughout the country Reddy adds, some 18mcmd (million cubic metres per day) of gas from fields operated by state-run ONGC and its joint ventures are still being supplied to non-core industries such as petrochemicals units and refineries.
• Reddy says this quantity should be diverted for power generation and fertilizer plants. To bolster his argument, he points out that the Centre had snapped supplies to non-core industries as Reliance's output declined to around 38 mcmd from 60 mcmd.It's the oil ministry and not the ministerial panel that distributes gas from fields which were given to ONGC or its JVs without bidding. This is commonly called APM or administered pricing mechanism, though the price is the same as supplies from Reliance - $4.20 per unit excluding taxes and other charges.
• Reddy's stand would add weight to the demand of private power firms. Top promoters, including Reliance Power's Anil Ambani and Cyrus Mistry of the Tata Group, under the umbrella of Association of Power Producers on Wednesday had echoed the same demand during their meeting with PM's principal secretary Pulok Chatterjee.The ministerial panel is likely to meet on Friday to consider changes in the natural gas allocation policy. The panel, which would meet for the first time in more than 18 months, is also to consider recommendations of a Planning Commission report, which suggests reserving or preferential allotment of domestic gas only to fertilizer and power plants.

Source