Rangarajan Committee recommends average global prices for domestic gas
- Former Ranji player held, Sreesanth and others to be produced in court today
- Li Keqiang pitches for more Chinese investments as he backs trade balance
- All eyes on Narendra Modi as BJP set to discuss strategy for Lok Sabha polls
- SC agrees to hear PIL to stay IPL matches due to spot-fixing
- Monstrous tornado rips through US city of Oklahoma, 90 dead
The Prime Minister-appointed Rangarajan Committee has suggested mandating a price of domestically produced natural gas at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery.
The panel in its report made public today suggested first taking an average of the US, Europe and Japanese hub or market price and then averaging it out with the netback price of imported liquefied natural gas (LNG) to give sale price of domestically produced gas.
Industry sources, however, raised doubts saying acceptance of the recommendations would lead to overriding of the signed contracts. Currently, Production Sharing Contracts (PSC) provide for gas being sold at an arms-length price discovered through market bids invited from potential users.
Acceptance of the recommendation would mean government mandating a price of gas and ending the last of the remaining freedoms available, they said.
The government has already taken over the task of fixing users curbing marketing freedom guaranteed in PSC.
Sources also questioned how a market price in the US or Europe which is a function demand and supply in that region, could be applied to a hugely fuel deficit nation like India.
The US has low gas prices because of abundant fuel with the advant of shale gas while demand in Europe and Japan, unlike India, has fallen.
The panel headed by C Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, said the PSC provides for arm's length pricing and prior Government approval of the formula or basis for gas pricing, subject to policy on natural gas pricing.
"Since no market-determined arm's length price currently obtains domestically and nor is this likely to happen for several more years, a policy on pricing of natural gas has been proposed," it said.
The Committee recommended deriving one price from "the volume-weighted net-back price to producers at (LNG) exporting country well-head for Indian imports for the trailing 12 months."
- 'Sophisticated' Indian cyberattacks targeted Pak military sites: Report
- Talkative Li quoted Weber, Hegel, Jobs, said PM is large-hearted
- Bihar food corp ends up with chaff as rice worth Rs 535 cr vanishes from mills
- In 7 lucrative minutes on May 9, Sreesanth bowled 6 balls, bookie made Rs 2.5 cr
- India and China ask border envoys to work on more steps
- Former Ranji player among 3 more held