The petroleum ministry is considering a new price for domestic gas that would be lower than the $8.4 per unit reached by the formula suggested by the C. Rangarajan panel constituted by the earlier UPA government.

 

 

 On the related issue of allowing the Reliance Industries (RIL)-led consortium the new price for gas from its eastern offshore fields, the ministry is considering the option of making the company eligible for charging new price after it makes up a supply shortfall.

 

 A ministry source told IANS Saturday that it has sent a proposal for a new committee on gas pricing for approval to the Prime Minister's Office, that would elaborate an alternative formula to that recommended by the C. Rangarajan panel.

 

 The Cabinet Committee on Economic Affairs had on June 25 decided to defer implementation of the Rangarajan formula till Sep 30 and come up with a new regime by Oct 1.

 

 RIL and its partners BP Niko Resources have served an arbitration notice on the government on revising their gas price, which expired on March 31 this year.

 

 The ministry has imposed a penalty on the company for failing to meet output targets from RIL's D-1 and D-3 fields in the KG-D6 offshore block to the extent of 1.9 trillion cubic feet of gas.

 

 The new government has decided to defer the implementation till September-end to hold wider consultations with various stakeholders.

 

 "The present government is considering the matter. The present government has not taken a final decision in the matter. As and when a decision is taken, the House will certainly be taken into confidence,"  Finance Minister Arun Jaitley said Friday in his response to supplementaries during Question Hour in the Lok Sabha.

 

 The source told IANS a new panel would be asked to take into consideration the concerns of the power and fertilizer ministries about the impact of the steep hike recommended by the Rangarajan committee.

 

 Among the options being considered is rupee-pricing of gas, as has been suggested by Jaitley, so as to cushion prices against foreign exchange volatility, the source said.