A probe has been sought into changes in the contract for import of LNG from Qatar by a firm headed by the Petroleum Secretary, which resulted in gas prices jumping four-fold and entails an additional outgo of USD 55.5 billion (Rs 2.5 lakh crore) for users. 

Petronet shares had plunged in excess of 2% today. 

Member of Parliament from Gujarat Mukesh B Gadhvi has written to Prime Minister Manmohan Singh seeking a probe into how Petronet LNG (PLL) agreed to a USD 12.66 per million British thermal units price for 7.5 million tonnes of liquefied natural gas (LNG) imported from RasGas of Qatar, instead of the previously agreed USD 3.04 per mmBtu. 

Stating that the additional expenditure of Rs 2.5 lakh crore involved in the hike was more than the figure floating in the case of the 2G scam, Gadhvi said this happened when the Petroleum Secretary was the Chairman of PLL and the chairman/directors of four leading oil PSUs were members of the company board. 

"Instead of protecting the country's interests, these authorities have played role in benefiting RasGas," he added. 

In 1999, in response to a tender, RasGas had offered to sell LNG to PLL at USD 2.53 per mmBtu at a crude oil price of USD 20 per barrel. 

The LNG price was to rise or fall by 2 cents per mmBtu in tandem with every dollar movement in oil price. At a USD 100 a barrel oil rate, the LNG price was to be USD 4.13 per mmBtu. 

But strangely, an unsolicited offer from RasGas pricing LNG in a band of USD 16-24 per barrel oil price (USD 2.01 per mmBtu to USD 3.04 per mmBtu gas price) was accepted by PLL. 

Further, in 2003, Petronet renegotiated the price and agreed to having a fixed price at USD 20 per barrel of oil (USD 2.53 per mmBtu) for five years from 2004-2009 and indexation with actual crude prices thereafter, he wrote. 

This led to the price going up by USD 1 per year for five years from 2009, and from January, 2014, it would be USD 12.66 per mmBtu at an oil price of USD 100 per barrel. 

Had Petronet not changed the contract, the price of LNG from Qatar would have been USD 3.04 per mmBtu for 25 years. 

But now, users will have to pay USD 12.66 per mmBtu for 15 years, beginning 2014. 

The extra amount to be paid will be USD 3.7 billion a year and USD 55.5 billion (about Rs 2.5 lakh crore) over 15 years. 

Gadhvi, a Member of the Parliamentary Standing Committee on Petroleum and Natural Gas, had previously demanded that joint ventures run by public sector firms like Petronet should be brought under the audit purview of the CAG. 

"The public is entitled to expect a very high standard from the government," he wrote, seeking an enquiry, possibly by the CBI, into the whole issue.