Centre sets up panel to review gas pricing formula to curb inflation: Reports

Published on Sep 06, 2022 09:39 PM IST

Local gas prices are at a record high due to the surge in global prices because of the ongoing Russia-Ukraine conflict and are expected to rise further.

A worker trudges with his tricyle loaded with cooking gas cylinders for delivering to customers in the rain.
A worker trudges with his tricyle loaded with cooking gas cylinders for delivering to customers in the rain.
Written by Nisha Anand | Edited by Aniruddha Dhar

The government has set up a panel to review the country's gas pricing formula for locally produced gas. The move, aimed at providing a “fair price to the end consumer'', is expected to tame inflation and boost the use of cleaner fuel, reports suggest.

Since 2014, in efforts to boost local production, the government has followed a formula tied to global benchmarks including Henry Hub, Russian gas, etc. In 2016, the government began fixing the ceiling prices of gas produced from ultra-deepwater, high temperature and high-pressure fields and allowed the owners of these fields to market freely.

Local gas prices are at a record high due to the surge in global prices because of the ongoing Russia-Ukraine conflict and are expected to rise further.

The committee, headed by energy expert Kirit Parikh is expected to send its report by the end of this month. The panel will also suggest a 'market-oriented, transparent and reliable pricing regime for India's long-term vision for ensuring a gas based economy,’ the order said.

Also Read | Inflation down, growth up. What stagflation?

However, the panel’s recommendations will not be implemented in the next six-month revision of local gas prices from October, a government source said, adding that implementation requires cabinet approval.

The country has been battling inflation above the Reserve Bank of India's tolerance band of 2%-6% for seven consecutive months.

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