the formula to bring down the gas price from USD 8.4 as arrived at using Rangarajan formula, to about USD 7-7.5.
Another possibility, proposed two weeks ago, is to allow higher prices only on output that is in excess of current production; or to allow higher gas prices only for production from fields discovered under the New Exploration Licensing Policy like Reliance Industries-operated KG-D6 fields. This would mean state-owned ONGC, whose gas production comes from pre-NELP blocks, being kept out of price revision.
If this option is accepted, the new rate will apply to only 15 per cent of the domestic production (basically only KG-D6 of RIL), sources said.
The previous UPA government had in December last year approved a new formula for pricing all domestic gas from April 1 but general elections were declared before the new rate could be announced.
The oil ministry had on April 21 told Reliance Industries, who had been supplying gas from its eastern offshore KG-Df field at old price of USD 4.2 even after it expired on March 31, that the new rate will be implemented from July 1.
Sources said the government, which has been slapped with an arbitration notice by RIL and its partner BP for delay in implementation of the due gas price revision, does not want to miss this deadline.