The Union Cabinet on Thursday approved a new formula for pricing of natural gas and imposed cap or ceiling price to rein in runaway prices of CNG and piped cooking gas.
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Natural gas produced from legacy or old fields, known as APM gas, will now be indexed to crude oil price instead of pricing it based gas prices in surplus nations such as the US, Canada and Russia, Union I&B Miniser Anurag Thakur told reporters after a meeting of the Cabinet.
From April 1, APM gas will be priced at 10 per cent of the price of basket of crude oil that India imports (Indian basket of crude oil). The rate such arrived at however will be capped at USD 6.5 per million British thermal unit as against current gas price of USD 8.57 per mmBtu.
The price such arrived at will also have a floor of USD 4 per mmBtu.
Rates will be decided every month instead of current practice of bi-annual revision, he said.
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