The Petroleum and Natural Gas Ministry has moved a Cabinet note recommending a $6.7 per million metric British thermal unit (mmBtu) price for domestically produced gas.

The issue is likely to be taken up by the Cabinet Committee on Economic Affairs (CCEA) this week.

The present price of $4.2 per mmBtu ends on March 31, 2014, and a new pricing formula has to be in place by that time.

With the Empowered Group of Ministers (EGoM) not having the mandate to decide on gas prices, the matter will now be placed before the Union Cabinet.

Highly placed officials in the Ministry said the Cabinet note had pitched for a single price for all kinds of gas produced in the country which would benefit Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL).

RIL must wait

The new gas prices, when approved by the Cabinet, will apply immediately to the state-run companies but Reliance Industries Limited (RIL) will have to wait till April 2014 to get the new prices.

The pricing issue has been under debate for some time with the Finance, Chemicals and Fertilizers and Power ministries opposing doubling of prices or linking it with the formula suggested by the Rangarajan panel.

They had argued that any kind of arbitrary hike would put a huge financial burden on the government in the shape of the fertiliser subsidy bill going up and also a hike in power tariffs.

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