High gas prices globally are impacting the pricing in the domestic market as the administered price mechanism is an average of what the global gas pricing is, Gas Committee Chairman Kirit Parikh told CNBC Awaaz on Tuesday.
His remarks come a day before the Gas Committee is likely to submit a report on draft regulations to change pricing for gas.
The expectation is that there could be a cap, which would be positive for the likes of city gas distribution companies like Indraprastha Gas Ltd (IGL), Gujarat Gas, Mahanagar Gas Ltd (MGL).
Parikh said, among the three main objectives of the report, one is focusing on increasing the contribution of gas in the energy mix from 15 percent. Currently, 50 percent of the gas is imported. The committee has submitted a few suggestions to reduce gas imports as well, he said.
Second is, consumers should have a fair price while the third is, it should not impact the government’s budget negatively.
The panel’s report suggests ways to increase domestic gas production and also talks about fair prices for consumers.
He, however, noted that there can’t be a price cap for APM gas producers like Oil and Natural Gas Corporation (ONGC) and Oil India right now because it is decided by the government.
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