In what could be a shot in the arm for the power sector, the Petroleum Ministry in a note to an empowered panel of ministers has clearly indicated that at least 10 mmscmd of gas should be allocated to the sector on priority basis, in the light of the fact that since the fertiliser sector gets first preference in terms of distribution, the supply to the power sector is inadequate.
According to official sources, the Petroleum Ministry has circulated a note to the empowered Group of Ministers (eGoM) on gas allocation, seeking greater allotment for the power sector and has also cited the need for re-prioritising the allocation of the natural resource on pro-rata basis.
Apart from the eGoM, the note has also been sent to the fertiliser, power and fertiliser ministries, seeking their comments. Sources in the know told The Pioneer that the note has underlined the point that gas distribution should be done on a pro-rata basis, which would ensure greater allocation to the power sector.
The eGoM is scheduled to meet and discuss the matter sometime later this month though no date has been finalised as this would be done once the comments from both the ministries arrive.
Sources pointed out that the Fertiliser Ministry is likely to object to the re-prioritising suggestion made in the note.
As of now the fertiliser sector is given first preference under gas allocation, followed by the power sector, lPG and city gas distribution. Sources pointed out that currently 41 mmscmd of gas is allocated to the fertiliser sector on first priority, out of which 31 mmscmd is used by the sector to feed domestic gas-based fertiliser plants and around 10 mmscmd is given to regasified liquefied natural gas (RlNG).
The note has suggested that out of this 41 mmscmd share given to the fertiliser sector, 10 mmscmd should be allotted to the power sector on pro-rata basis. Once approved, the decision may also reduce the import burden on the power sector, which has to rely heavily on shipments of liquified natural gas (lNG), which prove costly for the power industry.
Another positive ramification of the decision (if approved by the eGoM), would be increased supply to gas-based power plants, for which recently Power Minister Jyotiraditya Scindia had written to Petroleum Minister M Veerappa Moily, seeking urgent supply of around 6 mmscmd of gas from non-core areas.
The Power Minister had urged that since gas output from Reliance Industries ltd-owned KG-D6 basin had turned "zero" for the power sector, urgent supplies should be diverted for gas-based power plants which are starved of the natural resource.
Petroleum Ministry sources said that if the eGoM clears the re-prioritisation formula, and once it is distributed to the power sector, then the Power Ministry's request of seeking 6 mmscmd of gas from non-core sector for gas-based plants could be considered.
While Scindia has been batting for giving first priority to power sector in terms of gas supplies, even Moily has shown positive intent towards this, and hence the eGoM has been activated to meet on the issue.