Kirit Parikh panel for gas pricing freedom

The Kirit Parikh panel to review natural gas prices in India has recommended a price band of $4-6.50/unit for gas from old legacy fields, which account for over 70 per cent of the domestic output, and ushering in of fully market-determined rates by January 2027. It proposed price escalation for the old fields, with an increase of $0.5 per metric million British thermal unit (mmBtu) annually with no change in pricing for the first two years or a $0.25 per mmBtu escalation for five years.

If the recommendations are implemented, state-run ONGC and OIL will have to reduce prices from the current record level of $8.57/mmbtu and this, in turn, will help improve the margins of city gas companies like IGL, MGL and Gujarat Gas.