A high level committee headed by C Rangarajan has recommended linking omestically-produced natural gas to international benchmarks such as US' Henry Hub and prices of imports.

C Rangarajan is the head of the Prime Minister's Economic Advisory and his recommendation might increase the price of natural gas produced in the country to around $8 billion per million British thermal units (mmBtu). At present, the gas produced from the Reliance Industries Ltd(RIL)-operated KG Basin offshore field is priced at $4.2 per mmBtu.

Government officials said that the six-member committee has submitted their report to the Prime Minister's Office on December 20. The panel has prepared a formula based on the weighted average price of natural gas in North America, Europe and Japan markets along with the import price of liquefied natural gas into the country.

The panel has recommended deregulating the natural gas sector in a phased manner over the coming five years in the country to link the pries of the fuel to the more market related benchmarks. The Public sector giant Oil and Natural Gas Corporation offesr gap at even lower prices because it supplies the fuel to power plants and fertiliser units, which offers output at regulated prices.

The panel has also recommended that the production sharing contracts with oil companies should be based on the amount of oil or gas output that the company is willing to offer to the government.