Kirit Parikh panel for gas pricing freedom

It proposed price escalation for the old fields, with an increase of $0.5 per metric million British thermal unit (mmBtu) annually with no change in pricing for the first two years or a $0.25 per mmBtu escalation for five years.

By: ENS Economic Bureau
New Delhi | December 1, 2022 01:54 AM IST

1 min read

Kirit Parikh, Kirit Parikh committee, Kirit Parikh panel, natural gas prices, Mumbai news, Maharashtra, Indian Express, current affairs

The panel has suggested linking the price of gas produced by state-owned firms from fields given to them on a nomination basis to imported crude oil prices, Parikh said, after submitting the report to the Oil Ministry.

The Kirit Parikh panel to review natural gas prices in India has recommended a price band of $4-6.50/unit for gas from old legacy fields, which account for over 70 per cent of the domestic output, and ushering in of fully market-determined rates by January 2027. It proposed price escalation for the old fields, with an increase of $0.5 per metric million British thermal unit (mmBtu) annually with no change in pricing for the first two years or a $0.25 per mmBtu escalation for five years.

If the recommendations are implemented, state-run ONGC and OIL will have to reduce prices from the current record level of $8.57/mmbtu and this, in turn, will help improve the margins of city gas companies like IGL, MGL and Gujarat Gas. The panel has suggested linking the price of gas produced by state-owned firms from fields given to them on a nomination basis to imported crude oil prices, Parikh said, after submitting the report to the Oil Ministry. (FE, with PTI inputs)