Kirit Parikh committee has submitted its report on natural gas pricing formula.

It has recommended setting a floor price of $4 per mmbtu (million British thermal units) and ceiling price of $6.5 per mmbtu for gas produced from old legacy fields, with an option to increase the ceiling price by $ 0.5 per mmbtu every year and ushering in of fully market-determined rates by January 2027.

The panel has suggested linking the price of gas produced by state-owned firms from fields given to them on a nomination basis to imported crude oil prices

If the recommendations are implemented, ONGC and OIL will have to reduce prices from the current record level of $8.57/mmbtu and it would help improve the margins of city gas distribution (CGD) companies like Indraprastha Gas Limited (IGL), MGL and Gujarat Gas.