A review of the gas price formula is necessary as at the current prices it will be very difficult to get investment in production, industry has said.
The prices were slashed last week by 25 per cent to $1.79 per million British thermal unit (mBtu), prompting an outry. Price of gas from difficult fields such as in deep-sea was reduced to $5.61 per mBtu from $4.06 per mBtu.
Gas producers have written to the oil ministry offering various suggestions, including the review of the formula that puts domestic producers at a disadvantage over imported LNG.
They said ONGC in a recent communique to the government has stated that the break-even price to produce gas from new discoveries was in the range of $5-9 per mBtu.
