'Cabinet note on Kirit Parikh panel's recommendations on gas prices by month-end'

New Delhi, Dec 2 (IANS) The Central government is likely to seek stakeholders' comments on the recommendations given by the Kirit Parikh committee on natural gas prices, and prepare a cabinet note by the end of this month, highly placed sources have said.

The committee, which the government had set up in September this year to review the gas pricing formula, to ensure fair prices to consumers, has recommended a cap of $4-$6.5 per mmBtu for gas produced from older fields by ONGC and Oil India, with cap rising $0.5 per mmBtu every year and a deregulation from January 2027.

Petroleum ministry sources informed that the panel's recommendations are being reviewed and the cabinet note would be finalised by the end of December after seeking views of all stakeholders.

The Parikh committee, which had submitted its report to the ministry on November 30, has further suggested that there should not be any change in the existing pricing formula for difficult fields such as KG-D6 of RIL and BP PLC.

With petrol and diesel prices remaining unchanged since May 2022, official sources have pointed out that the under-recoveries on both the fuels combined is more than Rs 20,000 crore and therefore, finance ministry's intervention is being sought to lessen the burden.

Under-recoveries on LPG is not that much but on petrol and diesel it is high, especially on diesel as it sells more, sources pointed out.

As fuel prices are de-regulated, oil marketing companies raise prices as per their commercial considerations, sources informed, adding that there is no direction from the government to them on the matter.

With media reports stating that the European Union governments are learnt to have agreed on a $60 a barrel price cap on Russian crude oil on Thursday, government sources said that there is no final word on the cap and there is no clarity on the whole issue as of now.

Petroleum Ministry sources said that Russia is not the only supplier of crude oil for India and the country has several options to choose from, as more than 20 countries supply the commodity to it.

There are assurances that India's crude supplies won't be disrupted, especially from non-Russian suppliers, they informed further.

Sources further said that there is no sanction on purchasing crude oil from Russia due to the Ukraine crisis, the only thing is that it cannot be purchased beyond a certain price limit (which European Union governments are learnt to have finalised on December 1, as per media reports).

The oil marketing companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum are not getting any guidance from the government, sources informed, as they are free to buy crude from anybody, including Russia.