Gas pricing in India

Gas pricing in India - a story of evolution

1. Till 1970's the prices were suggested by expert committes 
2. In early 1970's ONGC set gas prices on a negotiated basis depending on the ability of the player to pay resulting in different prices for different consumer segments.
3. In mid 1970's prices were determined by the producers themselves, based on thermal equivalence of substitute fuels and opportunity cost to the consumer
4. In 1986 govt decided to fix UNIFORM prices year to year basis
5. Policy followed till 1991
6. From 1 Jan  1992, prices of NG were fixed for a period of 4 years to 31 dec 1995 based on the recommendation of the Kelkar committee. 
1. 1992 - 1000 - 1550
2. 1993 - 1000 - 1650
3. 1994 - 1000 - 1750
4. 1995 - 1000 - 1850
7. Post december 1995, price fixed at 1850 and 1000 for north eastern states. 
8. In January 1995, set up shankar committee which suggested that price should be related to the long run average cost cost of prouduction. The price came at Rs. 1854, the committee fixed the price at 1800 with a provision to increase price by 200-250 per scm per year. Government while accepting the numbers, related it to the price parity with fuel oils and annouced the pricing policy as a % of fuel oil. While the prices proposed were the same as suggested by the committee, the principles was changed. 
9. IN 1998-99, price linkage was 65% of the international price basket
10. in 1999-00 price linkage was 75% 
11. in 2000 price linkage was at 75% but the government introduced celings on prices of Rs. 2150, 2850 on a quarterly basis
12. In december 2001,MONPG plans to raise natural gas prices and bring linkage at 100% and double the gas celieing price. 
13. By 2002 the consumer price reached Rs. 2850
14.  Initial proposal was to raise prices  gradually from Jan 2003, but this has been deferred due to assembly elections in gujarat.  Incresased and completely deregulated by october 2003.