Energy cos warn against cost-plus pricing 

Energy cos warn against cost-plus pricing 

FPJ BureauUpdated: Saturday, June 01, 2019, 09:17 AM IST
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New Delhi:   Ahead of a panel of secretaries beginning work on a new gas pricing mechanism, an association of top energy firms has warned that going back to cost-plus pricing will be a retrograde step that will lead to rewarding inefficiencies.

The Association of Oil and Gas Operators, which is made up for over two-dozen members including the likes of Reliance Industries, ONGC, Cairn, BP, BG, BHP and Essar, on August 18 wrote to Oil Minister Dharmendra Pradhan listing out pricing challenges and how a market driven pricing will boost output.  In an uncertain and highly probabilistic business like oil and gas exploration and production where only one in 10 efforts is successful, it is best left to the market to decide which fields under what conditions will be viable, it said.

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