New Delhi, Jan 2 (IANS) The committee on oil and gas led by Prime Minister's Economic Advisory Council chairman C. Rangarajan Wednesday recommended that price of natural gas produced in India be determined by a formula based on international prices and the cost of imported liquefied natural gas (LNG), instead of the current market discovery system.
The committee also looking into production sharing contract (PSC) recommended a competitive bidding process for revenue sharing between the government and private contractors. The existing PSC allows the contractor to recover costs before sharing revenues.
On domestic gas pricing, it suggested that the average of the US, Europe and Japanese hub or market prices be calculated, which could then be averaged out with the netback price of imported liquefied natural gas (LNG) to determine the sale price of locally sourced gas.
In the backdrop of the controversy over CAG audit of Reliance Industries' KG-D6 gas block in Andhra Pradesh, the panel has recommended that Comptroller and Auditor General select blocks on the basis of financial size.
"The CAG will do direct auditing of blocks of higher value, whereas CAG-empanelled auditors will audit blocks of lower value," the Rangarajan Committee report said.