New Delhi, September 6
The government has set up a panel to review the formula that dictates the pricing of gas produced by companies such as ONGC and Reliance as it looks to moderate the steep increase that producers would have otherwise got.
The committee under former Planning Commission member Kirit S Parikh will suggest a “fair price to the end consumer”, according to an order of the oil ministry.
The panel, which will include representatives of the gas producers association as also producers ONGC and OIL, has been asked to submit its report by the month-end.
It also has a member from private city gas operators, state gas utility GAIL, a representative of Indian Oil Corporation and a member from the fertiliser ministry, the order said.
The government had in 2014 used prices in gas surplus countries to arrive at a formula for locally produced gas. The rates according to this formula were subdued and at times lower than the cost of production till March 2022 but rose sharply thereafter, reflecting the surge in global rates in the aftermath of Russia’s invasion of Ukraine.
The prices, which are payable to Reliance and ONGC, are due for revision on October 1.
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