Dissent over cut in gas supply from D-6 block-II: Power & fertilizer sector defend cuts

The meeting to address issues arising out of sectoral cuts in supply of D-6 gas was also attended by stakeholders from the power and fertilizer sector. The following issues were raised: 

• NTPC: The power major, while supporting the decision of the government, submitted that gas based power plants were established in the 1980s and onwards with the government deciding that fertilizer and power units provided the most appropriate uses of domestic gas. In the initial KG D6 allocation of 40 mmscmd, 18 mmscmd was allocated to power sector, out of which NTPC`s share was 2.67 mmscmd. Since 18 mmscmd was not sufficient to meet the requirement of power sector, as units were able to operate only at 60% to 70% PLF, The EGoM decided that additional gas was to be given to power sector. With the increased production of KG-D6 gas, the allocation to power sector was increased to 32 mmscmd, out of which NTPC`s share was just 4.46 mmscmd. NTPC informed that, in addition to KG D6 and other indigenous gas, it had to tie up spot RLNG from time to time. It was explained that lack of affordable power not only affects common man and farmers, but also industrial and commercial activities in the country. Power cannot be imported into the country, whereas other commercial products, like steel, can be, the company argued. 
• Fertilizer: The representative of Fertilizer Association of India submitted that the decision of the government to impose cut on non-core sector, while ensuring optimum supply to core sector, is in accordance with the policy of the government. The first use of gas in the country was for fertilizers. It was stated that the subsidy on fertilizer is in the range of Rs 60,000 to 70,000 crore. Keep the subsidy level down by allotment of cheaper gas to fertilizer units made sense. The FAI also said that there would a requirement of additional gas for the four fuel oil based plants converting to gas at an investment of Rs 5,000 crore. Keeping in view the ensuing kharif season, the first priority of the government should be to ensure supply of available natural gas to fertilizer, so that kharif production does not suffer,the FAI argued.