A Parliamentary panel report shows that the government has not conducted any due diligence before clearing the proposal to hike domestic natural gas price in line with the Rangarajan committee recommendation.
According to the report, submitted by the parliamentary standing committee on finance,
the government should take the cost of production into account before deciding gas price hike.
The panel, which is headed by former Finance Minister Yashwant Sinha, recommended ceiling on gas price as unlimited pricing may bleed the core sector.
The report also suggested a closer regulation on cost recovery and technological parameters of production.
The panel has reportedly recommended the government to ensure that Reliance Industries (RIL) 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.
It may be recalled that RIL is facing shortfall in production of gas from its KG-D6 block, off the Andhra coast.
At this juncture, transition from a regulated to a fully market-based system should be staggered,” said the report, sources said.
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