Iran hikes price of natural gas coming through IPI pipeline

New Delhi, Feb 22:  Iran has jacked-up by 20 per cent the price of natural gas that is to flow through the long- delayed Iran-Pakistan-India pipeline, making it the most expensive fuel in the country.
At the current crude oil price of USD 40 a barrel, Iranian gas will cost New Delhi USD 5.9 per million British thermal unit at Iran-Pakistan border, sources said.

Iran, which had originally priced its gas at USD 3.2, had in 2007 revised the rates to USD 4.93 per mBtu at USD 60 a barrel crude oil prices, which was accepted by India.

Sources said Iran has again changed the formulation that would mean India paying USD 7.1 per mBtu in the likely event of oil prices rising to USD 50 and USD 8.3 per mBtu if oil price was to touch USD 60 a barrel.

Added to this would be a minimum of USD 1.1-1.2 per mBtu towards transportation cost and transit fee that India would have to pay for wheeling the gas through Pakistan, they said.

Gas from the Panna/Mukta and Tapti fields in Mumbai offshore fetches the maximum USD 5.70 per mBtu, while Reliance Industries' Krishna Godavari basin gas has been priced at USD 4.20 per mBtu if crude oil price was USD 60 or more.

Sources said New Delhi was likely to reject the changes, which were conveyed by Iranian chief negotiator H Ghanimi Fard to Indian Ambassador to Iran last month, as unilateral revisions was against the spirit of stable contract regime. PTI