CII drills holes in Rangarajan Panel report on pricing of natural gas
incentivise investment in existing discoveries and future explorations in technically challenged areas like deep water, High Pressure-High Temperature (HPHT) and frontier areas," it said.
Stating that the proposed formula was complex and difficult to implement as it comprises too many variables with complex adjustments, CII suggested simplifying it by using an arithmetic average of Henry Hub, National balancing Point and Asia LNG delivered prices to reflect market prices at different markets/HUBs - Americas, Europe/FSU and Asia.
It also wanted provision of additional premium for technologically challenging areas as these are only viable at higher prices as also a roadmap for moving towards arms-length market determined pricing.
"While the report recognises that India needs to move towards achieving market determined pricing under gas-on-gas competition in the next 5 years, there are some concerns on the gas pricing recommendations and formula proposed by the Committee," it said.
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