The Kirit Parikh Committee, which recommended a floor and ceiling price for natural gas produced from legacy fields of state-owned producers to moderate input price for CNG and fertilizer, has favoured paying ONGC and OIL a premium of 20% over such price for any new gas production they add from old fields.
The panel, which submitted its report back to the oil ministry final week, has the beneficial benchmarking value of pure gas produced from ONGC and OIL’s legacy or outdated fields, referred to as APM gas, at 10% of the price of crude oil imported into India, in accordance with a duplicate of the report seen by PTI.
This fee would nonetheless be topic to a ceiling or cap value of USD 6.5 per million British thermal units, till full deregulation of costs is carried out in 2027. There would even be a ground of USD 4 with a view to cowl for the price of production and at a similar time preserving price for fertilizer, energy, and CNG, which use gas as entering uncooked materials, at manageable ranges.
The committee benefits absolutely from de-regulating APM gas value by January 1, 2027, “if the gas price volatility on the international market has moderated”. For tough fields, complete pricing and advertising freedom need to be given by January 1, 2026.
“To incentivise additional production from a new well or well intervention in the nomination blocks, the committee recommends a premium of 20% over and above the APM prices for ONGC/OIL,” the report mentioned. “The government may consider giving marketing freedom for this additional production from new wells or well intervention in the APM fields.”