Prime Minister-appointed Rangarajan Committee is expected to submit the report on changes in the present regime governing oil and gas exploration contracts as well as gas pricing by the first week of December. The committee is also likely to recommend a pricing formula, though it may refrain from a specific recommendation on the controversial issue of gas produced by Reliance Industries (RIL).
Chaired by C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, the panel was set up in May, to suggest changes in existing oil & gas exploration contracts with energy firms to minimize monitoring of expenditure, fix system to determine domestically produced natural gas price and modify existing profit-sharing mechanism, which, according to the national auditor, favoured private energy firms. However, the six-member Committee was previously to submit report by October 31 but was granted a month’s extension.
Moreover, the panel in its draft report suggested for sweeping changes in the present format of Production Sharing Contract (PSC), demanding the government to move to a production-linked payment regime where explorers bid for a percentage of output they would share with the government. And also the committee will suggest on the structure and basis for pricing of natural gas.
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