New Delhi, Apr 01: Petroleum minister Ram Naik today hinted at deregulation of natural gas pricing by the year end, by when costlier Liquefied Natural Gas (LNG) will arrive in India. "Natural gas prices will have to be deregulated by early 2004 when imported LNG from Qatar arrives at Dahej in Gujarat. The distortion between market determined price and the highly subsidised domestic natural gas prices will have to be removed to promote competition between the two," Naik told reporters on the eve of completing one year of oil sector deregulation here.
He said that the issue of decontrolling pricing of natural gas by removing the existing cap prices, has been referred to a Group of Ministers (GoM) as the move would have impacted subsidy carrying sectors like power and fertiliser.
"A decision was likely soon," he said while stating that his ministry had also circulated an integrated LNG policy that provided for tax breaks to make imported fuel cheaper.

The incentives envisaged in the policy include nil import duty and declared goods status making LNG taxable at a uniform central sales tax rate of 4 per cent as against the existing highs of 22 per cent in Gujarat.
Naik said that natural gas pricing were among the few grey areas left after the petroleum sector was deregulated on April 1, 2002 with the dismantling of the Administered Pricing Mechanism (APM).
"Seventy-five per cent of the task (of deregulation) has been accomplished and only 25 per cent work remains," he said while referring to impending deregulation of natural gas.
Bureau Report