New Delhi: Reliance Group’s Krishna Godavri basin was once seen as savior to rescue present energy crisis in India. On the contrary, its own problems are not getting subsided. On one hand, the government has now accepted that gas output from D-6 block of Reliance Group is going to fall further whereas company is constantly demanding to raise the gas price. New partner to Reliance at D-6, British Petroleum has advocated a 2.5 fold rise in the prices of gas from the basin.  

Petroleum Minister Jaipal Reddy has already visited the block a week back. Following that, a report has been prepared by petroleum ministry in which it has been accepted that in next two years gas production may fall upto 35 percent of the current production. In the current year, average gas production from KG D6 has come down to 4.267 crore mmcmd which is expected to fall to 2.764 crore mmcmd in 2012-13. Further the production may go down to 2.4 crore mmcmd.

It is clear that due to fall in gas production, there will be difficulty in meeting the demand promised to fertilizer and power companies.

BP Head, Indian operations Shashi Mukundan has said on Monday that gas pricing should be done on the basis of imports. Currently pricing is done by the government in consultation with the companies.    

Currently, gas is being sold to domestic customers at the rate of USD 4.2 per mmbtu. Price will go up to USD 9 per mmbtu when calculated on the basis of import cost.  Mukandan says that like the petroleum products, gas prices should also be based on import cost. 

Fall in production at Reliance gas field has affected the government’s plan to put up more power plants in the country. Three years back it was proclaimed that the big amount of gas production from KG basin will make the country self sufficient for power production in next few decades. But there has been constant decline in the gas production since then. Situation has worsened to such a state that basin is not been able to fulfill its prior commitment.