The Central Government has approved a new formula for fixing the price of domestic natural gas. Along with this, the maximum price limit for CNG and PNG supplied through pipes has also been fixed. Due to new formula the price of CNG and PNG will be reduced by 10 percent. The Cabinet meeting chaired by Prime Minister Narendra Modi has approved the recommendation of the Kirit Parikh Committee on Natural Gas.
Under the new pricing mechanism, a cap has been imposed to rein in runaway prices, which is 24% lower than current prices. This will make PNG 10% cheaper while CNG will cost 6-9% less.
Meanwhile, PM Narendra Modi has hailed the Cabinet Decision to protect the interest of consumers by reducing the impact of increase in international gas prices on gas prices in India. PM Modi Shared a tweet by Union Minister for Petroleum and Natural Gas, Shri Hardeep Singh Puri.
Price to be reduced by Rs.5 in Gujarat
The decision, will result in reduction of the prices of CNG and PNG up to Rs 5 in Gujarat. The new prices for CNG and PNG are likely to be announced on April, 8. The decision taken by Modi government will benefit 25 lakh gas holders in Gujarat.
Talking to media after the cabinet meeting, Union Minister Anurag Thakur said, ” The price of domestic gas has been now linked with imported crude instead of international hub gas and the price of domestic gas will be 10% of the international price of the Indian crude basket now onwards. The price will be reviewed and decided on a monthly basis.
Information and Broadcasting Minister Anurag Thakur, giving further information, added, ” The natural gas, produced from conventional fields (APM), will now be linked with crude oil prices like US-Russia. Earlier the prices were fixed on the basis of the price of gas. Now the price of APM gas will be 10 percent of the price of crude oil in the Indian basket. However, this cost will not exceed $6.5 per million British thermal unit (MMBtu). The base price has been fixed at $4 per MMBtu. The current price of gas is $8.57.
Recommendation to cover under GST
The Parikh Committee has recommended to bring gas under the ambit of GST. It has been recommended to impose a general tax ranging from 3 percent to 24 percent on gas. This will help to promote the gas market.