Government sets up Suresh Prabhu Panel to review Gas Pricing Formula
Union government will appoint Suresh Prabhu Committee to review the gas pricing formula. Suresh Prabhu is a former Union Power Minister under National Democratic Alliance (NDA) government led by Atal Bihari Vajpayee. The other members on the panel will be Pratap Bhanu Mehta, President and Chief Executive of Centre for Policy Research and Bibek Debroy of the same institute.
The decision to set up Suresh Prabhu Committee comes close on the heels of the Union government decision to put stay on the revision of natural gas price. The Union Cabinet had recently postponed the implementation of the C Rangarajan Committee’s pricing formula till September 30, 2014 for conducting a comprehensive review of the whole issue.
The implementation of the Rangrajan pricing formula would have doubled current gas rates to at least $8.4 dollars/mbtu resulting in increasing power cost by over Rs 2/unit, urea production cost by Rs 6,228/tonne and piped gas by Rs 8.50/kg.