NEW DELHI: India’s natural gas price review panel is set to favour linking the price of most local output to an Indian crude basket with a cap of $6.50 per million British thermal units (mmBtu) to shield consumers from the volatility in global markets, sources said.

In September India set up a panel headed by energy expert Kirit Parikh to review the India’s gas pricing formula to ensure fair prices to consumers after state-set prices of gas from old fields and a ceiling price for output from difficult blocks rose to a record high. The panel, which is likely to submit its report on Tuesday or later in the week, could suggest a road map to end the government’s role in gas pricing from 2026, two industry sources familiar with the content of the report said.

The people spoke on condition of anonymity because they are not authorised to speak to media. No immediate comment was available from the oil ministry.

India fixes prices of gas produced from the old fields of state-run Oil and Natural Gas Corp and Oil India Ltd and sets a ceiling price for output from difficult production areas such as Reliance Industries’ east coast block.

The two sets of prices - tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas - are annually revised in April and October. Old fields accounts for about 80% of India’s annual gas output of about 91 billion cubic metres.

For gas output from old fields, the report suggests a monthly revision in prices on the basis of 10% of the previous month’s average price for Indian Crude Basket, consisting mostly of 75% average of Oman and Dubai crudes and 25% of dated Brent.