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Government raises deepwater gas price ceiling
వార్తల్లో ఎందుకు?
Deepwater gas now gets $9.89 while APM stays at $7: the Kirit Parikh formula GS3 Energy tests
A higher ceiling for deepwater gas is aimed at encouraging output.
Why it matters: factual, Prelims-type
What you need to know
2 నిమి
The Centre has raised the price ceiling for gas from deepwater fields to $9.89 per MMBtu, while the cap for gas from nomination fields under the administered price mechanism stays at $7.
The 2022 formula that links administered gas prices to the Indian crude basket followed the Kirit Parikh committee.
మూలాలు: Topper IAS editorial (PIB / The Hindu / Indian Express)
ముఖ్య వాస్తవాలు
Remember these
- Price ceiling for gas from deepwater fields raised to $9.89 per MMBtu
- Ceiling for gas from nomination fields under the administered price mechanism (APM) stays at $7 per MMBtu
- The 2022 formula links administered gas prices to the Indian crude basket, with a floor and a ceiling
- The formula followed the recommendations of the Kirit Parikh committee
- MMBtu (million British thermal units) is the standard unit for pricing natural gas
ప్రిలిమ్స్ · మెయిన్స్
How the exam will ask it
ప్రిలిమ్స్
- The administered price mechanism (APM) applies to gas from nomination fields, and its price is set by the government rather than by the market.
- Under the 2022 formula, the price of domestically produced APM gas is linked to the Indian crude basket, subject to a floor and a ceiling.
- Gas from deepwater fields is allowed a higher price ceiling than APM gas, to encourage production from costly, technically difficult fields.
మెయిన్స్
GS3 Economy (Energy): India wants more domestic gas to raise its share in the energy mix, but deepwater output is costly and risky. The Kirit Parikh formula linked APM prices to the crude basket, and a higher ceiling for deepwater gas gives producers an incentive to invest. The way forward is to balance producer returns with affordability for fertiliser, power and city gas consumers, and to speed up exploration and pipeline infrastructure.
Quick recall
Answer before you reveal
The 2022 formula that links the price of domestically produced gas under the administered price mechanism to the Indian crude basket, with a floor and a ceiling, followed the recommendations of a committee headed by:
- Kirit Parikh
- C. Rangarajan
- Vijay Kelkar
- Urjit Patel
సమాధానం చూడండి
సమాధానం: A — Correct: Kirit Parikh — The Kirit Parikh committee recommended linking administered gas prices to the Indian crude basket with a floor and a ceiling. • C. Rangarajan — wrong: C. Rangarajan headed an earlier committee on gas pricing in 2012, not the 2022 crude-basket formula. • Vijay Kelkar — wrong: Vijay Kelkar is associated with committees on fiscal policy and petroleum subsidies, not the 2022 gas pricing formula. • Urjit Patel — wrong: Urjit Patel headed a committee on monetary policy framework and an earlier hydrocarbon review, not the 2022 gas pricing formula.
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