India’s cabinet is set to adopt a gas panel report this week, which has recommended capping the price for most local gas at $6.50 per million British thermal units (mmBtu) in April, two sources said on Monday.

India last year set up the panel, led by energy expert Kirit Parikh, to review 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 hard-to-access, rose to record highs.

The panel suggested that the monthly price of gas produced from old blocks be fixed at 10 per cent of the monthly average of the Indian crude basket, with a cap of $6.5/ mmBtu and a floor price of $4/ mmBtu.

The price will apply to industrial buyers and companies in the fertiliser and city gas distribution sectors and will be fixed on a monthly basis. The current price of gas from old blocks is set at $8.57 and is valid from October to end-March.

The average price of the crude basket from 26th of the previous month to 25th of the current month would be used to determine the price of gas for the next month, one source familiar with the matter said.

Given that the average price of 10 per cent of India’s crude basket from February 26 to March 25 is over $7/mmBtu, the price in April would be at the cap of $6.5/mmBtu, the source said.

Over 80 per cent of India’s yearly gas output of 91 billion cubic metres comes from old fields owned by ONGC and Oil India Ltd.