Oil Ministry shuns the plan to form panel for fixing gas prices

The oil ministry has shunned the plan to form an inter-ministerial committee to determine gas prices every quarter based on the C Rangarajan committee formula and has decided to utilize its own expertise to compute new rates. With this development, the ministry now wants its number-crunching wing, the Petroleum Planning & Analysis Cell (PPAC), to approve and notify gas prices calculated on the basis of the complex formula every quarter. The formula was notified in January and the new system to determine gas prices was to be adopted starting April 1, but since the model code of conduct for elections restricted the government from taking any policy decision, the Election Commission held back the ministry from implementing the new system. Initially, the ministry wanted the committee to be led by the PPAC's director-general, while other members were to be the financial adviser to the integrated finance division, Gail India's marketing director, Petronet LNG's commercial director and a Customs official. But later it was observed that no committee was required and the prices could be fixed by the ministry after obtaining data. With this, Oil ministry has now requested the PPAC to determine gas prices three weeks before the beginning of every quarter after obtaining data subscriptions and manpower from Gail, which has expertise in gas marketing. Post to which, PPAC could notify the prices on a quarterly basis based on the procedure approved by the Cabinet Committee on Economic Affairs (CCEA) and by obtaining the data from standard sources.