The Government of India has appointed consultants to work out sector wise pool pricing for KG basin gas or any natural gas.

This means that the transport cost of natural gas will be shared by all the states without regard to the location.

This will penalise Andhra Pradesh State as we are home to biggest source of Natural Gas in the KG basin. The price of gas will be same whether you set up a power plant/industry at Kakinada or in Gujarat which is 1600 km away from the KG basin. This in effect, sharing the cost of transporting the gas from kakinada to Gujarat.

This is not in practice in Coal sector as pit based thermal plants get the coal at about 1200 rupees per ton whereas thermal plants such as Rayalaseema power plant get the coal at 3200 rupees per ton as the transport cost is borne by the consumer. There is no transport cost equalization in coal or iron ore and hence this is working in favour of mineral rich States like orrissa, jharkhand, chattisgadh in attracting large scale investments.

This pooled pricing will be costly for the household gas, auto gas, power from gas based plants in Andhra Pradesh and will work against the State in attracting investments. It is necessary to oppose it in the interest of the State of AP.