Panel moots gas pricing freedom from 2026

• The Kirit Parikh Committee, which was set up by the government to review the gas pricing formula, has submitted its recommendations to the Ministry of Petroleum and Natural Gas (MOP&NG).
• The committee has submitted its recommendations to the Ministry of Petroleum and Natural Gas (MOP&NG).

Major Recommendations

• A price band of $4-6.50/unit for gas from old legacy fields, which account for over 70% of the domestic output.
• A price band will ensure a predictable pricing regime for producers and protect consumers by moderating CNG and PNG price spikes.
• Linking the price of gas produced by state-owned firms from fields given to them on a nomination basis to imported crude oil prices rather than benchmarking them to gas rates in international market
• Proposed abolishing formula-based gas pricing and implementing fully market-determined rates by January 2027.
• Including natural gas in the one-nation-one-tax regime of GST.
• The panel was in favour of setting up a mechanism similar to the compensation cess regime.
• Also, the panel was in favour of moderation in rates of excise duty.

Prelims Take Away

• Kirit parekh committee