Gas pricing report on Sep 10; Ranga formula may be junked

The four-member secretaries panel is expected to submit its report on the gas pricing issue by September 10. A final decision on the matter is expected by the end of this month. CNBC-TV18’s Nayantara Rai reports.The panel, when it had been set up had said it would submit its report in about two weeks’ time. It has emerged that it is sticking to that timeline. Sources in the new government indicate that the panel has found several flaws in formula suggested the committee headed by former RBI governor C Rangarajan [which had been put in abeyance by the Election Commission].

Also read: Modified Ranga formula proposes gas price at $6-6.7/ mmbtuA key point that has been debated is why should older wells – some in existence for 10 to 30 years -- enjoy a new gas price regime? It remains to be seen whether the secretaries’ panel will recommend a uniform gas price or will only the new fields actually get the new rates. Another point to see is whether the panel will tackle the issue of subsidies -- the expenditure secretary is part of it – as gas prices going up would result in power and fertiliser subsidies going up too.