India to Have New Gas Price Formula by September End

Indian government will most likely announce a new gas price formula by September end, country’s oil minister Dharmendra Pradhan said Wednesday.

Replying to questions in the upper house of the Parliament, Pradhan said the NDA government decided to review the pricing formula keeping in mind public interest and recommendations of the Parliamentary Standing Committee, reports Press Trust of India. 

He said a decision will be taken keeping in mind the interest of investors and public and a new formula will be announced by September 30. Till then, the $4.2 per mmBtu price will continue.

The previous UPA government had approved pricing formula suggested by a panel headed by C Rangarajan. The new price regime was supposed to originally come into effect from April 1 but was deferred because of national elections in May.

The price of gas, according to this formula, comes to around $8.3 per million British thermal unit for April-June quarter, almost double the current price of $4.2.

Parliamentary Standing Committees on Finance as well as Petroleum had called for a review of the formula suggested by the panel headed by Rangarajan saying gas price should have some linkage with the cost of production, adds Press Trust.