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.