Gas pricing regime should be remunerative for producers: Panel

A Parliamentary committee today said the domestic gas pricing regime should be remunerative so as to ensure fresh investment in the sector even as it stated that a hike gas price will heighten the subsidy burden.
The Standing Committee on Finance, headed by former Oil Minister M Veerappa Moily, said that all actions of the government should be dictated by "public interest" and also fair to all stakeholders.
"The Committee are of the firm opinion that it is also important to have a policy regime that ensures remunerative price to gas producers as well in order to stimulate fresh investments in the sector," the report tabled in Parliament said.

Simultaneously, it added the government should devise an optimum pricing formula, which is fair to all stakeholders and also safeguards the long term interest of economy.
Government in October had approved raising natural gas price to USD 5.61 per mmBtu from November 1.
It also modified the Rangarajan formula approved by previous UPA government to bring down the increase in rates from USD 8.4 to USD 5.61. The rates will be revised every six months with the next revision being on April 1.

The Committee also said that the increase in price of gas will heighten the subsidy burden on the exchequer, as the MRP of urea is statutorily controlled.

It noted with "satisfaction" that the Government while approving National Gas Pricing Guidelines, 2014 have taken all these aspects into consideration.
Among others the Committee also include former Prime Minister Manmohan Singh.