Natural gas producers like Reliance Industries will need government approval for the formula used to calculate the price of the fuel, Petroleum Minister Murli Deora said on Tuesday.
"Formula on the basis of which gas pricing is done... shall be approved by the government," Deora told the Rajya Sabha in New Delhi.
Deora said a Committee headed by Joint Secretary and Financial Adviser in his Ministry, had recommended formulation of transparent guidelines for approving natural gas pricing basis for the purposes of calculating government revenue from gas fields (profit petroleum and royalty).
The Committee was constituted after the Ministry rejected Mukesh Ambani-run Reliance Industries' proposal to sell gas from its KG-D6 fields in Bay of Bengal to Anil Ambani's company saying the price of 2.34 dollars per million British thermal unit was not arrived at arms-length basis.
"The Committee being a departmental one and entrusted with the task of valuation of government take under the Production Sharing Contracts (PSCs), did not include members of other ministries," he said while replying to supplemetaries.
However, the Committee had sought the views of various stakeholders across different sectoral industries and users.
To a separate question, Minister of State for Petroleum and Natural Gas Dinsha Patel said valuation of gas would be done based on most recent competitively determined price in the region duly indexed to the present.