The Prime Minister-appointed Rangarajan Committee may this week suggest sweeping changes in future oil and gas contracts by asking explorers to bid for a percentage of output they would share with the government.

Sources said the panel may ask the government to move to a production-linked payment regime where explorers will be required to bid for the government share of production after royalty.

Adding fuel to fire, people haven’t received subsidy

Mahipal Singh Yadav (31) is a contractual junior manager at the Kotkasim Gram Sewa Sahakari Samiti. Joining the cooperative, he had hoped, would be like any other job. However, since the direct cash transfer of kerosene subsidies scheme was piloted here, Mr. Yadav has found himself at the receiving end of people’s anger. The KGSSS operates five fair price shops (FPS) in the Kotkasim block. As the scheme came into effect, kerosene prices were hiked to Rs. 45 and then to Rs. 50 a litre from Rs. 15.

Close on the heels of the government rejecting the standing committee on finance's decision to keep 26% FDI cap in the insurance sector, fresh tension is brewing between the parliamentary panel on petroleum and natural gas and the Centre over a proposal to limit the sale of subsidised cooking gas to individuals with an annual income of less than R6 lakh.

While the panel has favoured this formula to make the government's subsidy scheme more targeted, the Centre has quietly buried the proposal. If the House panel's proposal is implemented, households with any one individual earning more than R 6 lakh a year would not eligible for subsidised cooking gas and would have to buy the fuel at market prices.

Petronet LNG has gained 31.5 per cent since the closing lows of Rs 122.77 in May. The rise comes on the back of benefits accruing to the company from the steady rise in demand for gas. The supply, however, has been limited, given the falling production from the Krishna-Godavari (KG) basin.

The company’s volumes have risen 6.3 per cent to 135 trillion British thermal units (TBTU), or 2.6 million tonnes, in the September quarter, as compared to 127 TBTU in the June quarter. The company has 10 mtpa capacity at Dahej (Gujarat) and is likely to commission its five mtpa Kochi plant by the March 2013 quarter. However, in the absence of a proper pipeline infrastructure, the contribution from Kochi could remain limited to one mtpa, analysts say. Thus, the benefits from the new capacities will not accrue in the near term.

Policy aims to incentivise fertilizer cos to set up new plants

The Cabinet Committee on Economic Affairs (CCEA), on Thursday, approved a urea investment policy, which is likely to incentivise fertilizer companies to set up new plants and expand existing capacity. India imports over 30 per cent of its urea requirement and the policy aims at reducing that. But it is unlikely to have any impact on existing prices. “The new urea investment policy has been cleared,” sources said after the CCEA meeting here.

Deploring the government for introducing a cap on subsidised LPG cylinders in an arbitrary manner, the Parliamentary Standing Committee on Petroleum and Natural Gas has asked the government to review the cap of six cylinders a household a year. It said such restrictions should not be placed on people having income below a threshold.

The panel, headed by Aruna Kumar Vundavalli, said it recommended last year ending supply of LPG cylinders to the rich and affluent sections who, it described as, people having annual income more than Rs. 6 lakh and those holding constitutional posts and public representatives such as MPs and MLAs. It had asked the government to review and amend the decision in line with the panel's recommendations.

Cabinet will have to clear proposal: Moily

The Manmohan Singh government indicated on Tuesday that the cap on the subsidised LPG cylinders would go up from six to nine a household a year. “I think it is likely to go up definitely from six to nine cylinders, and the Cabinet [Committee on Political Affairs] will have to grant its approval to the proposal,” Petroleum and Natural Gas Minister Veerappa Moily told journalists at a function here on Tuesday.

State-run NTPC has decided to sign fuel supply agreements (FSAs) with Coal India in a month, without any major change in the norms of draft FSAs.

Both firms decided to bury differences at a meeting in Kolkata on Monday between the chiefs of the public sector undertakings, S Narsing Rao of CIL and Arup Roy Choudhury of NTPC. “Both parties have discussed various issues. Many of the problems can be thrashed out and the FSAs can be signed in a month,” Roychoudhury said. Rao said the Kolkata-based coal major will not go for a change in the revised draft FSAs, cleared by its board in September. In January, a meeting will be held in this regard to sign FSAs.