×

UPSC Courses

DNA banner

DAILY NEWS ANALYSIS

  • 07 December, 2022

  • 5 Min Read

Kirit Parikh Gas Pricing Panel

Kirit Parikh Gas Pricing Panel

The government recently appointed a Kirit Parikh committee to review the gas pricing formula.

The committee's major recommendations:

Maximum cost:

  • A fixed pricing band for gas from old fields, known as APM (Administrative Price Mechanism) gas, is required.
  • These fields produce two-thirds of the country's natural gas.
  • This would provide producers with a predictable pricing regime while also lowering CNG and piped cooking gas prices.
  • Prices have risen by 70% since 2021 due to rising input costs.
  • Currently, legacy or old fields are governed on a nomination basis without any requirement of profit sharing, and thus the government controls its price.

Linking the price:

  • The panel has advocated for a link between gas prices and imported oil.

If the recommendations are followed, the state-run ONGC and OIL will be forced to lower their prices from their current levels, which will help improve the margins of city gas companies such as IGL, MGL, and Gujarat Gas.

Category with no cut:

  • The allocation of APM gas will continue to prioritise city gas.
  • The sector will be in the 'no-cut' category, which means that if production falls, supplies to other consumers will be cut first.
  • Other suggestions include including gas in GST with a five-year compensation period.
  • This would be accomplished by combining the central government's excise duty and the various rates of VAT levied by state governments.
  • Gas price caps must be lifted within three years.
  • The government should gradually withdraw from the gas allocation business.
  • There will be no changes to the current pricing formula for fields with difficult geology.
  • Deepsea or high-temperature, high-pressure zones are currently governed by a different formula that includes an element of imported LNG cost and is subject to a cap.

Need of this committee:

  • The committee was tasked with proposing a fair price to the end-user while ensuring a market-oriented, transparent, and dependable pricing regime for India's long-term vision of ensuring a gas-based economy.
  • The mandate is to propose a regime that would aid in increasing domestic production in order to meet the target of 15% of energy coming from gas by 2030.

Way Forward

  • The government still uses a formula to determine the administered pricing mechanism (APM).
  • Domestic producers must have complete pricing freedom, as this is the only way to increase domestic production.
  • India must increase its share of gas consumption from 6% to 7% and protect consumers from receiving implicitly subsidised gas.
  • Lowering import prices will have an impact on domestic producers, and the government should consider giving complete pricing freedom.

Source: The Indian Express


Ahom Burial Mounds in Assam

Ahom Burial Mounds in Assam The Charaideo Maidams in Assam has just been selected as a candidate for the UNESCO World Heritage Center by the Union Government. More on the news: From among the 52 locations across the nation seeking for  the World Heritage Site tag, The Prime Minister chose Maidams mound burial site of Assam.

Issues faced by Women in Sports 

Issues faced by Women in Sports  Brij Bhushan Sharan Singh, head of the WFI (Wrestling Federation of India), has recently been accused of sexual harassment by some athletes. If WFI does not respond to the Sports Ministry's request for an explanation within 72 hours, the Ministry will move to take action against the Federation

Prison Reforms

Prison Reforms During the annual police meeting in New Delhi, Prime Minister proposed prison reforms. What were the Prime Minister's Speech's Main Highlights? He made a point of highlighting the value of the National Data Governance Framework for facilitating smooth data interchange between agencies. Additionally, de

Trademark

Trademark A case of trademark infringement brought by the international fast food chain Subway against Suberb, a restaurant in Delhi, was recently dismissed by the Delhi High Court. What is trademark? It is an image, term, or phrase that is used to represent a company. A trademark's owner may assert "exclusive rights"

Chargesheet is not a “Public Document”: SC

Chargesheet is not a “Public Document”: SC Chargesheets are deemed to be private documents as declared by the Supreme Court bench. About the news: The Supreme Court ruled that the government is not required to post chargesheets on police or official websites in order to give the public unrestricted access to them. Acc

Toppers

Search By Date

Post Feed

Newsletter Subscription
SMS Alerts