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Amid rising concerns over skyrocketing global natural gas prices jacking up energy and industrial costs, and derailing the efforts to contain inflation, the Centre has begun a review of the pricing formula for domestically-produced gas.
The Ministry of Petroleum and Natural Gas has set up a committee under noted energy expert Kirit Parikh to review the current gas pricing formula, Reuters reported, adding that the government order in this regard spoke of the need to ensure “a fair price to the end consumer”. Though the committee has been asked to submit the report by the end of this month, its inputs won’t be used for the next six monthly revision of the domestic gas prices for the October 2022-March 2023 period.
The next price revision will likely lead to a further rise in prices of gas from both the normal and the “difficult” fields, given that the benchmark global prices have remained elevated.
In the last revision effective April 1, 2022, the price of natural gas from old and regulated fields was doubled to $6.1 per million British thermal unit (mBtu). Price of gas produced from difficult fields like KG-D6 block operated by Reliance Industries-bp combine, was hiked from $6.13 earlier to 9.92/mBtu for the April-September 2022 period.
Notably, the review of gas pricing formula taking consumer interests into consideration comes despite Reliance Industries repeatedly urging the Centre to remove the cap on gas price as it “remains disconnected with the global price trends, irrespective of any rise or a fall”. Of natural gas consumed in India, almost 50 per cent is imported LNG.
