The Union Cabinet on Thursday gave nod to new gas pricing formula and imposed a cap to keep rates of CNG, piped cooking gas under check, Union Minister Anurag Thakur informed.
The Cabinet approved revised domestic gas pricing guidelines. The price of natural gas will be 10 per cent of the monthly average of Indian Crude Basket, to be notified monthly.
"Now, gas price, instead of international hub gas price, has been linked to imported crude. And price of domestic gas will be 10% of international price of Indian crude basket, to be notified monthly...," said Union Minister Anurag Thakur.
This move has been made to ensure stable pricing in the regime and provide adequate protection to producers from adverse market fluctuation.
The Cabinet approved floor of $ 4/MMBtu price for APM gas, ceiling of $6.5/MMBtu as against current rate of $8.57, Anurag Thakur said.
Natural gas produced from legacy or old fields, known as APM gas, will now be indexed to crude oil price instead of pricing it based gas prices in surplus nations such as the US, Canada and Russia, Anurag Thakur told reporters after a Cabinet meeting.
From April 1, APM gas will be priced at 10 per cent of the price of basket of crude oil that India imports (Indian basket of crude oil). The rate such arrived at however will be capped at USD 6.5 per million British thermal unit as against current gas price of USD 8.57 per mmBtu.
The price such arrived at will also have a floor of USD 4 per mmBtu.
Rates will be decided every month instead of current practice of bi-annual revision, he said.
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