Indian House Panel Wants a Relook at Gas price Hike

The parliamentary standing committee on finance on Friday asked the Indian government to review its decision to increase gas prices.

Training guns on Reliance Industries Ltd (RIL) for the shortfall in production from the KG-D6 block, off the Andhra coast, the committee is learnt to have asked the government to ensure “the contractor delivers for shortfall on production at $4.2 per million British thermal unit (mBtu) rather than getting benefits of the new pricing for previous commitments”, Business Standard said.

The committee also batted for ceiling on gas price as unlimited pricing may bleed the core sector, while seeking a closer regulation on cost recovery and technological parameters of production, Business Standard reported.

The committee said that due diligence was not done before arriving at the decision to revise gas price and the government should also take the cost of production into account.

“At this juncture, transition from a regulated to a fully market-based system should be staggered,” said the report, according to those in the know of the development, Business Standard reported.

The panel's report is expected to be tabled in the monsoon session of Parliament beginning next month.