New Delhi: The cabinet of the central government has approved the new formula for gas pricing on Thursday. In the meeting, a ceiling has been fixed on the prices of CNG and pipe-supplied LPG. The move will result in a 10% reduction in PNG for domestic consumers and about 7% reduction in CNG.
Union Minister Anurag Thakur said that the price of domestic gas has now been linked with imported crude instead of international hub gas. The domestic gas price will now be 10% of the international price of the Indian crude basket. This will be decided every month.
Domestic gas price is now linked to imported crude instead of international hub gas and domestic gas price will now be 10% of international price of Indian crude basket. It will be decided every month: Union Minister Anurag Thakur, Delhi pic.twitter.com/6BIWb4sw7h
— ANI_HindiNews (@AHindinews) April 6, 2023
Anurag Thakur said – The price will be fixed on the basket of crude oil
Anurag Thakur said that gas produced from conventional or old fields is known as APM gas. It will now be indexed to crude oil prices instead of pricing based on gas prices in countries like US, Canada, Russia.
From April 1, the price of APM gas will be 10 per cent of the price of a basket of crude oil imported by India. However, such a rate would be capped at US$6.5 per million British thermal unit as against the current gas price of US$8.57 per mmBtu. A similar price will also have a ceiling of US$ 4 per mmBtu. He said the rates would be fixed every month instead of the current practice of two-year revision.
Cabinet approves revised domestic gas pricing guidelines
price of natural gas to be 10% of the monthly average of Indian Crude Basket, to be notified monthly
Move to ensure stable pricing in the regime and provide adequate protection to producers from adverse market… pic.twitter.com/DMPwXu9Jd0
— ANI (@ANI) April 6, 2023
it would be beneficial
- With the implementation of the new formula, CNG and PNG will be cheaper.
- Domestic consumers will get gas at a more stable price.
- Fertilizer making companies will get cheap gas. Fertilizer subsidy will decrease.
- ONGC and Oil India will get a boost for new investments.
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