The source told IANS the new panel has been asked to take into consideration the concerns of the power and fertilizer ministries about the impact of the steep hike recommended by the Rangarajan committee."
New Delhi, Aug 24 - A four-member committee of secretaries (CoS) set up by the government to review the gas-pricing formula will Monday hold its first meeting with stakeholders, a petroleum ministry source said.
A committee has been formed with secretaries of the power and fertilizer ministries as well as the expenditure department as members. Additional secretary in the petroleum ministry Rajive Kumar will be the member-secretary, the senior official told IANS.
The committee has invited representatives of both producers and consumers Monday to discuss the issue, he added.
Given the Sep 30 deadline for announcing the new gas price, the panel has been asked to submit its report in two or three weeks.
It will examine the whole range of issues related to gas pricing, including the Rangarajan formula, which was approved by the previous UPA government, but could not be implemented ever since the Election Commission barred it from announcing the price in the period leading up to polling.
A new price based on the Rangarajan formula would have most likely doubled the gas price to $8.4 per unit from April 1.
The Cabinet Committee on Economic Affairs had on June 25 decided to defer implementation of the Rangarajan formula till Sep 30 and come up with a new regime by Oct 1.
The Mukesh Ambani-led Reliance Industries (RIL) and its partners British oil giant BP and Niko Resources have served an arbitration notice on the government on revising their gas price, which expired on March 31 this year.
The oil ministry, on the other hand, has imposed a penalty on the company for failing to meet output targets from RIL-led consortium's D-1 and D-3 fields in the KG-D6 eastern offshore block to the extent of 1.9 trillion cubic feet of gas.
The new government has decided to defer the implementation till September-end to hold wider consultations with various stakeholders.
There has been opposition to the Rangarajan formula from various quarters on account of its likely effect on electricity tariff, urea cost, CNG rates and piped cooking gas price.
Every dollar increase in gas rates will lead to a Rs.1,370 per tonne rise in urea production costs and a 45 paise per unit increase in electricity tariff. There would be a minimum Rs.2.81 per kg increase in CNG rates, and a Rs.1.89 per standard cubic metre hike in piped cooking gas cost.
The source told IANS the new panel has been asked to take into consideration the concerns of the power and fertilizer ministries about the impact of the steep hike recommended by the Rangarajan committee.
Among the options being considered is rupee-pricing of gas, as has been suggested by Finance Minister Arun Jaitley, so as to cushion prices against foreign exchange volatility, the source said.