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Industry Dream of 'Premium for Gas from Difficult Fields' Marred by Finance Ministry's Disapproval

News

Finance Ministry has returned an Oil Ministry proposal to allow market price for part of the natural gas produced by firms like ONGC and Reliance from difficult fields. "Finance Ministry has made certain observations on the proposal and returned it without approval," a top source with direct knowledge of the development said.

Source:  ET

SNP Insights

Lower Domestic Gas Prices compared to interantional rate, discouraging Upstream players to invest in new difficult terrain gas field in India. At a time when country's gas demand is poised to take off & hence India is striving hard to secure gas import from international market, declination of premium from difficult domestic gas field may dampen the domestic exploration & hence investment in Upstream segment may go further down.

Source: SNP Infra Research