India's leading Left party on Tuesday asked the government to reject the gas pricing formula submitted by the largest private sector oil refiner Reliance Industries [Get Quote] Limited.

The Communist Party of India Marxists said that Reliance gas pricing was "artificially inflated."

Saying that that pricing of natural resources such as gas should not be left to market forces, the Left group urged the Manmohan Singh government to decide on a price based on "actual production costs plus reasonable profit."

Reliance has proposed to the government that it will sell gas at $4.33 per million British thermal unit from its Krishna basin field.

But CPIM argued that the present price formulation was in no way consistent with the price of $2.34 quoted by the company in 2004 for supplying gas to NTPC.

"Even if the price quoted in 2004 through competitive bidding is indexed to the present, it can no way allow an 85 per cent hike as the RIL has done while fixing the price at $4.33 mmbtu. The RIL proposition is thus an artificially inflated one and shoul d be rejected," it said in a statement.

The party said formulation for gas price is based on the linkage with the international price of crude oil and not with the cost of producing gas that is wholly a domestic product, it said.

"There is absolutely no justification for such linkage which is being made only to find out a route to artificially inflate the price," CPIM added.