New Delhi: In one of the last reforms in the oil and gas sector, the government is set to free up pricing of all domestically produced gas that would help scale up local production from fields of ONGC, OIL, Reliance, and Vedanta and help create a uniform gas where the fuel is freely tradable on exchanges.
Government sources said that discussions on lifting price restrictions on locally produced natural gas have started that would culminate into a decision about the timing of the new reform initiative. The current timing is considered ideal to free up gas prices as the oil market and prices have remained stable.
A panel led by the Niti Aayog vice-chairman has also suggested free-market pricing for natural gas produced from all fields to boost domestic output.
“We are looking at all proposals on bringing out domestic gas production from pricing regulations. A cabinet note proposing the changes would soon be finalised so that new system is put in place at the earliest,” said a government official privy to the development.
However, any move to completely lift price regulation in the gas sector will be done gradually as has been suggested by the Kelkar Panel. This would mean that the present system of regulated gas pricing for domestic production would continue for at least three more years but during the period producers would be given freedom to sell a portion of the total output under negotiated pricing deals (market-determined) with their customers. (IANS)