• Latest
  • Trending

Oman Gas Price Hike: Cabinet To Decide On Arbitration In London

April 16, 2012

Mamata’s Opposition Unity Call Has Big Relevance For 2024 Lok Sabha Polls

April 1, 2021

Amit Shah Is Dream Merchant For Sonar Bangla Without Knowing Its Origin

April 1, 2021
ADVERTISEMENT

After Freedom House, V-Dem, The Turn Of The US State Department

April 1, 2021

How Long This Jobless Economic Planning Will Continue In India?

April 1, 2021

Modi Govt’s Three Farm Laws Constitute An Attack On Adivasis

April 1, 2021

Biden Wants Corporations And The Rich To Pay For Rebuilding America

April 1, 2021

Modi Govt’s Judo Technique Pays Off In Electoral Bonds

March 31, 2021

Electoral Bonds: Supreme Court Has Evaded The Real Issue

March 31, 2021

Risks Of India Going From Bad To Worse Due To New Covid-19 Wave

March 31, 2021

Protecting The Vulnerable At The Time Of Pandemic Is Imperative

March 31, 2021

Mamata Has Sent A Strong Message To BJP By Contesting From Nandigram

March 31, 2021

Sumitra Mahajan Was A Woman Parliamentarian For The Longest Term

March 31, 2021
ADVERTISEMENT
  • Setup menu at Appearance » Menus and assign menu to Top Bar Navigation
Thursday, April 1, 2021
No Result
View All Result
IPA Newspack
  • Setup menu at Appearance » Menus and assign menu to Main Navigation
  • Setup menu at Appearance » Menus and assign menu to Main Navigation
No Result
View All Result
IPA Newspack
No Result
View All Result
ADVERTISEMENT

Oman Gas Price Hike: Cabinet To Decide On Arbitration In London

IPA Staff by IPA Staff
April 16, 2012
in Uncategorized
3 min read
0
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

NEW DELHI: The Union Cabinet will soon take a call on the vexed issue of whether to go for international arbitration at a London tribunal against Oman, which raised natural gas price from 77 cents to $3 per unit, leading to a sharp rise in the price of fertiliser imported by India under a long-term off-take agreement.
The finance ministry has rejected a request for increasing the price of urea imported from Omifco, an equal joint venture of Indian and Oman firms, in line with the higher gas price implemented by the Arab nation at the beginning of this year.
Confident of victory in the dispute, North Block strongly favours taking the matter to the International Arbitration Tribunal in London, but other ministries including the chemicals and fertilisers ministry do not favour any such step, fearing disruption in the supply of the most commonly used plant nutrient in India.
“Since there is divergence of views on the matter, we have decided to take it to the Cabinet within a fortnight,” said a government official privy to the development.
According to Indian officials, Oman’s revision of the price of natural gas supplied to Omifco violates the agreement that mandates supply of gas at a fixed price till 2015. Omifco is a joint venture between Indian cooperatives Iffco and Kribhco owning 25% each and the Oman government’s Oman Oil Company, which owns 50%. India’s agreement with Oman allows it to purchase all the urea produced by Omifco for 15 years at predetermined prices.
The gas price revision warrants an increase in the import price of urea from $120 a tonne to $200 a tonne for the 2 million tonne supplied by Omifco every year.
The price revision was due only in July 2015.
The proposal for price revision of imported urea prepared by the fertiliser department was withdrawn on March 28 after the finance ministry refused to accept it saying it would push up India’s fertiliser subsidy by R500 crore. A revised proposal is being worked out.
The fertiliser department favours a price revision of imported urea in the light of higher gas price, since Omifco’s urea supplies even at higher price would still be cheaper than the urea sold in global markets at $400-450 per tonne.
“Besides, if Oman stops supplies for a year, we would be forced to import at higher prices, risking a significantly higher subsidy outgo,” said the person. India may also find it difficult to enforce any favourable decision from the arbitration tribunal on a sovereign government, with which the country has no comprehensive economic cooperation agreement, said the official.
An official told FE that Oman may agree to a slightly lower price of $2.5 per million metric British thermal unit (mmBtu) if India doesn’t go for arbitration. At $2.5 per mmBtu, the import price would work out to $160 a tonne, said the person.
The Oman government increased the price of gas from January 1, 2012, for all industries, including Omifco, which uses gas as feedstock to produce urea. However, Omifco has been permitted to make provisional payments at the old rates till March 31. The revised price was to be implemented from April 1.
The gas price revision follows a drop in the country’s oil and gas reserves estimate as well as public protests against giving cheap gas to Omifco while people faced higher power tariffs.
Flaring Up
*Oman has raised gas price from 77 cents to $3 from the beginning of 2012, which would raise urea import costs
* Finmin has rejected a request to correspondingly raise urea price, since it would boost fertiliser subsidy bill
* Officials say Oman’s move violates an agreement which mandates supply of gas at a fixed price till 2015
* The agreement allows India to buy all urea produced by Omifco for 15 years at predetermined prices

RelatedArticles

Mamata’s Opposition Unity Call Has Big Relevance For 2024 Lok Sabha Polls

Amit Shah Is Dream Merchant For Sonar Bangla Without Knowing Its Origin

After Freedom House, V-Dem, The Turn Of The US State Department

ADVERTISEMENT
Previous Post

DGH Wants Oil Ministry To Decide On RIL-BP Request

Next Post

Prize Petroleum Prepares For Post-Merger Life

IPA Staff

IPA Staff

Related Posts

IPA Service

Mamata’s Opposition Unity Call Has Big Relevance For 2024 Lok Sabha Polls

by ipaadmin
April 1, 2021
IPA Service

Amit Shah Is Dream Merchant For Sonar Bangla Without Knowing Its Origin

by ipaadmin
April 1, 2021
IPA Service

After Freedom House, V-Dem, The Turn Of The US State Department

by ipaadmin
April 1, 2021
IPA Service

How Long This Jobless Economic Planning Will Continue In India?

by ipaadmin
April 1, 2021
IPA Service

Modi Govt’s Three Farm Laws Constitute An Attack On Adivasis

by ipaadmin
April 1, 2021
IPA Service

Biden Wants Corporations And The Rich To Pay For Rebuilding America

by ipaadmin
April 1, 2021
Load More
Next Post

Prize Petroleum Prepares For Post-Merger Life

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Advertisement

ADVERTISEMENT

Recommended

Towards Qayamat, Come What May

3 years ago
Farmers Are Getting All Out Support For Their Just Demands

Farmers Are Getting All Out Support For Their Just Demands

4 months ago
Load More
ADVERTISEMENT

Contact

India Press Agency D-34, Basement, Gulmohar Park, Delhi - 110049 Gautam Nagar, New Delhi
ADVERTISEMENT
ADVERTISEMENT

About Us

IPA Newspack

IPA Intelligence Unit is a specialist service of India Press Agency (IPA), one of the oldest news agencies of India.

  • Setup menu at Appearance » Menus and assign menu to Footer Navigation

© 2020 India Press Agency - Latest Breaking news and Opinion IPA Media Group | Arabian Post

No Result
View All Result

© 2020 India Press Agency - Latest Breaking news and Opinion IPA Media Group | Arabian Post

Login to your account below

Forgotten Password?

Fill the forms bellow to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In