The Petroleum & Natural Gas Ministry on Wednesday proposed the Cabinet to nearly double the price of domestically sold gas from the current $4.2 per million British thermal unit (mmbtu) to $8-8.5 mmbtu.

The proposal has been made on the recommendations of the Rangarajan Committee that recently suggested a roadmap for gas pricing to help state-owned petroleum companies like Oil & Natural Gas Corporation and Oil India Limited cut their losses.

However, in case of Mukesh Ambani-owned RIL, which has long been demanding an increase in gas price to nearly $13 mmbtu, the price increase will not take effect before April next year, the deadline laid down by the Empowered Group of Ministers in 2009.

According to the recommendations made by the Rangarajan Committee, gas prices should be fixed at an average of international hub prices and the cost of imported LNG, rather than the current method of market discovery.

People familiar with the matter revealed that the oil ministry wants the pricing formula recommended by the Rangarajan Committee to apply to all forms of natural gas, viz. conventional, shale as well as coal-bed methane. The price determined would be applicable to all consuming sectors homogeneously. The ministry is also said to be eager on putting the panel's recommendations into immediate effect and announcing new prices without any further delay.

In case the cabinet approves the proposal, it would put an additional financial burden of an estimated Rs 7000 to Rs 8000 crore on the common man.