Press Information Bureau

Government of India

Cabinet Committee on Economic Affairs (CCEA)

15-March-2017 19:54 IST

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister ShriNarendra Modi todaygave its approval for marketing and pricing freedom to the Coal Bed Methane (CBM) Contractors to sell the CBM at Arm's Length Price in the domestic market. While discovering the market price for Arms Length Sales, the Contractor has to ensure a fully transparent and competitive process for sale of CBM with the objective that the best possible price is realized for the gas without any restrictive commercial practices.

CBM contractors have also been permitted to sell the CBM to its any affiliate, in the event contractor cannot identify any buyer. Royalty and other dues to the Government, however, shall be payable on the basis of Petroleum Planning & Analysis Cell (PPAC) notified prices or selling prices, whichever is higher.

The policy is expected to incentivize the CBM operation in the country to boost gas production and will generate economic activities which in turn will be beneficial for creating more employment opportunities in CBM operations and related activities.

*****

AKT/VBA/SH

Pricing freedom for CBM allows arm's-length sales with transparent competitive processes and permits affiliate sales subject to government dues. Policy grants marketing and pricing freedom to CBM contractors to sell CBM at Arm's Length Price through a fully transparent and competitive sales process; contractors may sell to an affiliate if no buyer is identified. Royalty and other government dues are payable on PPAC notified prices or the selling price, whichever is higher.