The government received the committee’s advice on the gas price mechanism on Wednesday, which was led by Kirit Parekh a Chairman of the Sustainable Gas Pricing Committee. He insisted to bring GST in gas.
According to him, India has 12–13 different types of gas fields, each with a unique gas price structure. The formula has been made simpler by the committee.
According to him, the primary issue with APM (Administered Price Mechanism) gas was that fields were long ago given to ONGC and OIL without any sort of royalty or profit sharing. In these areas, the government holds a stake of close to 57%.
He added that consumers get the gas from these fields at extremely reduced prices. A floor price of USD 4/mmBtu and a maximum price of USD 6.5/mmBtu have been proposed in light of this.
Every year, the maximum limit will increase by USD 0.5. This will be put into effect starting on January 1st, 2027.
Other gas fields have price independence with an upper bound; the committee has recommended that the upper bound be eliminated starting on January 1, 2026. They will have complete discretion to decide on prices and develop marketing plans as a result.
The committee has additionally suggested that natural gas be included in the Goods and Services Tax (GST). According to Parekh, it is crucial.