Govt willing to pay more for LNG from Iran  

Petroleum Minister Murli Deora today ruled out withdrawal of subsidies to cooking gas and kerosene after March deadline.

''As per strict instructions of Congress president Sonia Gandhi, the subsidies on kerosene and cooking gas will not be withdrawn. The UPA chief has asked the Petroleum Ministry to supply the fuels at the same price,'' Mr Deora told reporters here.

However, the government is not keen on increasing the subsidy and cutting the prices of the two fuels.

In 2002, the government had said it would phase out subsidies on LPG and kerosene over three years. In 2005, the deadline on subsidies was extended to March 31, 2007.

Mr Deora told reporters here on the sidelines of the inaugural ceremony of Oil and Gas Conservation Fortnight that he would meet Chidambaram next week to review the central taxes on petroleum products.

The import tax on crude oil is now 5 per cent, while both gasoline and diesel attract a 10 per cent rate. The excise tax on both gasoline and diesel are 8 per cent, but crude oil is exempt from this.

The Oil Ministry wants the Finance Ministry to reduce the taxes on oil products so that refining and marketing companies can pass on the potential savings to the consumers.

On the liquified natural gas (LNG) from Iran, Mr Deora said the government was willing to pay more than the earlier negotiated price of $22 billion for supply of five million tonnes of LNG per annum for 25 years beginning 2009-end, with an option to buy an additional 2.5 million tonnes a year.

"We have been telling (Tehran) they should honour the first contract and then we could talk about the price," he said.

Mr Deora, ahead of the Iranian Oil Minister Kazem Vaziri-Hamaneh?s visit next week, said any LNG if bought over the five million tonnes level can be negotiated at higher prices.

While India wants Tehran to "honour" its commitment to supply the LNG to India at around $2.9 per million British thermal unit (mbtu), Iran, however, now wants over $4.50 per mbtu.

Mr Deora said, "We are looking forward to discussing two pending matters. One is our contract with them for LNG supplies, and the second the Iran-Pakistan-India pipeline."

The minister said a secretary-level trilateral meeting would take place in Tehran on January 20-21 to discuss the pipeline and pricing of gas to be supplied to India and Pakistan through the proposed $7-billion project.

Source: The Tribune, New Delhi
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