Mumbai: The government has agreed to Reliance Industries'' pricing formula for the gas it plans to produce from July next year, but with some modifications.

The empowered group of ministers (EGoM) headed by external affairs minister Pranab Mukerjee has set the price at $4.20 per mBtu, 8.32 per cent lower than what Reliance proposed in May.

At the prevailing rupee-dollar rate the gas price works out to Rs172.20 per mBtu.

Reliance is expected to start production of gas from July 2008.

The group of ministers decided that the price formula submitted by Reliance Industries Limited (RIL) and Niko Resources Limited (NRL) may be accepted with some modifications, an official statement of the ministry of petroleum and natural gas said.