A committee of secretaries headed by Cabinet Secretary K M Chandrasekhar has submitted its report on pricing of natural gas from Reliance Industries' [Get Quote] Krishna Godavari fields to the Prime Minister's Office.

Chandrasekhar handed over the report to the PMO on Thursday evening, sources in Cabinet Secretariat said. The report is believed to have agreed with the contention of ministeries of petroleum and law that the government needs to honour its contractual obligation but stressed on providing the fuel to fertiliser and power sectors at affordable price.

Ministries of Petroleum and Law had separately pointed out that the commitment under Parliament-enacted New Exploration Licensing Policy, which promises an investor freedom to sell oil and gas at market determined prices, needs to be honoured to show stability of policy and contracts to international investors.

Mukesh Ambani's RIL had won the KG-D6 block in first round of NELP in 2000.

The price of $4.33 per million British thermal unit (mBtu) proposed by RIL for the gas it plans to produce from KG-D6 from July 2008 had met stiff opposition from power and fertilizer sectors in general, and Mukesh's younger brother Anil in particular.

Sources said the report calls for addressing the contention of fertilizer sector that government subsidy burden would go up substantially if delivered price of gas was higher than $3 per mBtu (RIL's delivered price came to around six dollars per mBtu), while deciding on the price.

It wasn't clear as to what the report said on how the government should exercise its right -- cash or kind -- for taking its share from the field.