Fixing gas prices

Producers should have policy certainty

In the past decade, India has repeatedly reviewed the formula to price natural gas. Every subsequent review has sliced away price reform goals that were the original purpose of these exercises, and increased the discretion of bureaucrats in price setting. The latest such initiative, led by former Planning Commission member Kirit Parikh, has recommended another method. The committee has suggested a cap of $6.5 per million British thermal units (Btu) as a ceiling and a floor of $4 per million Btu on gas supplies from ONGC and Oil India’s older fields, or administered price mechanism (APM) gas. It’s unclear though