Oil and Natural Gas Corp on Monday said it was making an annual loss of about Rs 700 crore (Rs 7 billion) on sale of gas at administered prices and hoped the government will soon decide on hiking the fuel price.
"We currently get a price equivalent to $1.95 per million British thermal unit (mBtu) but we break-even at $ 2.5 per mBtu," ONGC Chairman and Managing Director R S Sharma told reporters on the sidelines of the 5th Asia Gas Partnership Summit in New Delhi.
Sharma said the present price of Rs 3.2 per cubic meters that ONGC gets for gas produced from fields given to it on nomination basis, was not sustainable.
The hike suggested by Tariff Commission to Rs 3.6 per cubic meters would only help ONGC break-even. For gas from new fields, like the deep sea gas field ONGC has made in KG basin off the Andhra coast, Sharma sought market price.
"We hope that the Cabinet will soon decide on raising APM price of our gas," he said. APM or administered price is referred to for gas produced by ONGC and OIL from oil fields given to them on nomination basis.
Price of about 80 per cent of gas produced by ONGC is regulated by the Government. Petroleum Ministry had in January recommended to the Cabinet a 16 per cent increase in price of gas produced by ONGC and Oil India Ltd but with inflation at over-three year high, a decision has been put on hold.
"In 2006-07, we made a net loss of Rs 600 crore (Rs 6 billion) on natural gas sale. The figures for 2007-08 have not been calculated but it is about Rs 700 crore (Rs 7 billion)," he said, while pitching for an immediate increase in natural gas prices.