Union Cabinet approves revised domestic gas pricing guidelines
2 min read . Updated: 07 Apr 2023, 10:31 PM IST
Premium- The guidelines will ensure a stable pricing regime for domestic gas consumers, provide adequate protection to producers from adverse market fluctuation
The Union Cabinet approved revised domestic gas pricing guidelines and the price of natural gas will be 10 per cent of the monthly average of the Indian crude basket.
There will be monthly notification to ensure stable pricing in regime and provide adequate protection to producers from adverse market fluctuation.
The guidelines will ensure a stable pricing regime for domestic gas consumers, provide adequate protection to producers from adverse market fluctuation and provide incentives for enhancing production.
The guidelines will be applicable to the gas produced from nomination fields of ONGC/OIL, new exploration license policy blocks (NELP) and pre-NELP blocks.
The new guidelines will come into force from Saturday.
Union Cabinet accepted an expert committee report to price bulk of domestically produced natural gas at 10 per cent of month average import price of crude oil with a floor of USD 4 per million British thermal unit and a cap of USD 6.5, tinkering with the panel's suggestions will help the government avoid prices going up right in the middle of general elections next year.
"City gas distributors could reduce prices of compressed natural gas (CNG), used by vehicles, and piped natural gas (PNG), used by homes, by 9-11 per cent, with the government accepting the key recommendations of the Kirit Parikh Committee," Crisil Ratings said. "Had the previous pricing regime continued, prices would have likely risen."
The Cabinet decided that rates will not change for two years and will be increased by USD 0.25 annually thereafter.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has approved the revised domestic natural gas pricing guidelines for gas produced from nomination fields of ONGC/OIL, New Exploration Licensing Policy (NELP) blocks and pre-NELP blocks, where Production Sharing Contract (PSC) provides for Government's approval of prices, said a Press Information Bureau (PIB) statement on April 6.
(with inputs from agencies)