Panel formed to review gas price mechanism

Committee to have secretaries of power, fertiliser and expenditure departments

Ahead of the September 30 deadline for announcing new gas prices, the government has set up a four-member committee of secretaries (CoS) to review the gas-pricing formula. The panel will hold its first meeting with stakeholders on Monday.

“A CoS has been formed with secretaries of the power ministry, fertiliser ministry and expenditure department as members. Petroleum ministry’s additional secretary Rajive Kumar will be the member-secretary,” said a source close to the development.

He added the petroleum ministry has called representatives of both producers and consumers on Monday to discuss the modalities.

The panel will give its report in two or three weeks.

The previous United Progressive Alliance government had on January 10 notified a new domestic gas pricing formula, which would have doubled the rates to $8.4 a million British thermal units from April 1.

However, the general elections were announced before the new price could come into effect.

The Election Commission asked the then government to leave the decision to the new government and revision of rates was put off to July 1. The new government on June 25 decided to defer a decision until October, pending wider consultations.

Reliance Industries and its partners in the eastern offshore KG-D6 block - BP of the UK and Niko Resources of Canada —had on May 9 served a pre-arbitration notice on the government alleging failure to implement an earlier decision of gas price hike effective April 1 was preventing sanctioning of investments of $ 4 billion. This was followed by a formal notice of arbitration on June 17.