The supply of natural gas from Mumbai High's offshore oil and gas fields has been decreasing slowly for the last few years, he said. During October 2000, only 10 million cubic metres per day of gas was supplied to industrial establishments from Uran, he added. "There was a further decline in supply last month, resulting in a decrease in supply to all customers proportionately," he said, adding that Maharashtra chief minister Vilasrao Deshmukh had requested the Centre to increase the supply of gas to MSEB as a special case.

The Central government, after reviewing the case, has decided to increase supply from 2.24 million cubic metres per day to 2.50 million cubic metres per day to give a temporary reprieve to MSEB, Mr Naik said. "The original MoU between GAIL and MSEB stipulates use of dual fuel. However, since MSEB is not using alternate fuel, the problem has become serious," he added. MrNaik said that Dabhol Power Company (DPC) has signed an agreement with Indian Oil Corporation (IOC) for the supply of 1.2 million tonne of naphtha per annum for its power plant in Guhagar along the Konkan coast.

This is the largest ever petroleum product supply agreement (term sheet) with a public sector giant by the DPC.