Tuesday, December 7, 2021
Home Business Facing Losses Of Rs 6-7K Crore Due To Current Govt Mandate: ONGC

Facing Losses Of Rs 6-7K Crore Due To Current Govt Mandate: ONGC

- Advertisement -

New Delhi: The Oil and Natural Gas Corporation (ONGC) on Friday said that it is losing Rs 6,000-7,000 crore after the government-mandated rates for the fuel had dropped to a decade low.

Director of ONGC (Finance), Subhash Kumar said, “The government-mandated rates are way below the cost of production of USD 3.5-3.7 per million British thermal unit.”

Every single dollar reduction eventually leads to a revenue loss of about Rs 5,200 crore and a Rs 3,500 crore on profit.

“Our losses will be in the order of Rs 6,000-7,000 crore in current fiscal,” Kumar was quoted as saying by Hindustan Times.

After the government introduced a new gas pricing formula that had “inherent limitations” as it was based upon the pricing hubs of gas-surplus countries such as the US, Canada and Russia, the ONGC has been facing losses on 65 million standard cubic metres per day of gas it produces from domestic fields.

According to this formula, the price is revised twice every year. The rate for the period beginning October 1 has been cut down by 25 per cent to USD 1.79 per mmBtu.

Kumar is still hoping that the government will act upon the request made by the firm and a price would be set to check losses.

Chairman and Managing Director of ONGC, Shashi Shanker said that the present gas price does not the cost. Also, the company has made representations to the Ministry of Petroleum and Natural Gas for suitable amendments to the formula.

“Ministry is seized of the matter. They are favourably inclined and a committee has been constituted to look into this,” he said.

He also added that prices have to be remunerative if the domestic output has to be raised.

“There is talk of a floor price and changes in the formula itself by linking the rate to relevant market benchmarks such as Japan Korea Marker (JKM). I cannot comment on what shape it will take but we are certainly hopeful,” Shanker said.

Mostly, the ONGC’s productions is from the nomination fields. The company is also hoping to add 15 million standard cubic meters of output from KG basin using the pricing freedom it already has.

Every six months, the rate according to the new formula is revised every six months. The prices effective from October 1 have been cut to USD 1.79 per mmBtu which is lowest that the ONGC has got when the government moved towards deregulating gas pricing.

Each year, the prices are set on April 1 and October 1.

- Advertisement -
- Advertisement -
Stay Connected
16,985FansLike
2,458FollowersFollow
61,453SubscribersSubscribe
Must Read

Former UP Shia Waqf Board Supremo Waseem Rizvi Converts To Hinduism

Ghaziabad: Ex-Uttar Pradesh Shia Waqf Board chairman Waseem Rizvi quit Islam and converted to Hinduism on Monday. The head priest of Dasna Devi temple in...
- Advertisement -

Centre Regrets Nagaland Deaths: Amit Shah

New Delhi: Union Home Minister Amit Shah told Parliament on Monday that the centre regretted 14 civilians’ death in Nagaland following a goofed-up Army...

8-Year-Old Advay Dhoot Now Among India’s Top 4!

Mumbai: Eight-year-old Mumbai boy Advay Dhoot entered the top four in India as World Chess Federation (FIDE) released the new players rating list recently. The...

PMLA Case: ED Summons Jacqueline Fernandez

New Delhi: Bollywood actress Jacqueline Fernandez was summoned by the Enforcement Directorate (ED) in connection with a case of prevention of money laundering that...
Related News

Former UP Shia Waqf Board Supremo Waseem Rizvi Converts To Hinduism

Ghaziabad: Ex-Uttar Pradesh Shia Waqf Board chairman Waseem Rizvi quit Islam and converted to Hinduism on Monday. The head priest of Dasna Devi temple in...

Centre Regrets Nagaland Deaths: Amit Shah

New Delhi: Union Home Minister Amit Shah told Parliament on Monday that the centre regretted 14 civilians’ death in Nagaland following a goofed-up Army...

8-Year-Old Advay Dhoot Now Among India’s Top 4!

Mumbai: Eight-year-old Mumbai boy Advay Dhoot entered the top four in India as World Chess Federation (FIDE) released the new players rating list recently. The...

PMLA Case: ED Summons Jacqueline Fernandez

New Delhi: Bollywood actress Jacqueline Fernandez was summoned by the Enforcement Directorate (ED) in connection with a case of prevention of money laundering that...

India Thrash New Zealand By 372 Runs, Reclaim ICC Top Spot

Mumbai: India registered an emphatic 372-run victory against the current World Test champions New Zealand at the Wankhede Stadium here on Monday. By virtue...
- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here