The Union Government revised the formula determining gas prices

– An article by Shivani Gadre

A new pricing formula for domestic natural gas has been approved by the Central Government, which also includes a maximum price limit for CNG and PNG supplied through pipes. As a result of this updated formula, the prices of CNG and PNG will be lowered by 10 percent. The Kirit Parikh Panel on Natural Gas had submitted its recommendation, which was subsequently approved by the Cabinet meeting chaired by Prime Minister Narendra Modi.

The latest pricing mechanism involves a cap to control the surge in prices, which is set at 24% below the current prices. Consequently, PNG will become 10% more affordable, and CNG will see a reduction in cost by 6-9%.

As a result of this decision made by the Modi government, the prices of CNG and PNG in Gujarat are expected to drop by up to Rs 5. The new prices for both fuels will be announced on April 8, and approximately 25 lakh gas holders in Gujarat will benefit from this decision.

During a press conference after the cabinet meeting, Union Minister Anurag Thakur explained that the price of domestic gas will now be linked to imported crude instead of international hub gas. Going forward, the price of domestic gas will be set at 10% of the international price of the Indian crude basket, with a monthly review and decision-making process.

According to the Parikh Committee’s recommendation, gas should be included within the purview of GST. The Committee suggested levying a general tax on gas, ranging from 3% to 24%. This proposal aims to bolster the gas market.