Govt bans sale of gas, CBM to self

New Delhi: The government has banned natural gas and coal-bed methane (CBM) producers from buying their own produce in the newly notified gas marketing freedom guidelines.

The government on October 15 notified the Natural Gas Marketing Reforms that give producers the freedom to discover the market price of gas through a standard e-bidding process.

The notification, which follows the Cabinet Committee on Economic Affairs approving gas reforms, also gives them the liberty to market or sell the gas produced to anyone including affiliates.

However, the producer or any member of its gas field consortium cannot bid and buy the fuel, the notified guidelines said.

"Sale to affiliates will be allowed if affiliates participate in the open competitive process," it said. "However, the contractor or its constituents shall not be eligible to participate in the bidding process."

"Seller and buyer will not be the same entity," it added. This, the notification said, not just applies to conventional natural gas but also to CBM.

In 2017, Reliance Industries had bid and bought all the gas it was producing from its Sohagpur East and Sohagpur West CBM blocks in Madhya Pradesh. The company used the gas at its petrochemical plants in Patalganga and Nagothane in Maharashtra, and Vadodara and Jamnagar in Gujarat.