Weeks after implementation of a contentious gas pricing formula was put off by three months, oil minister Dharmendra Pradhan on Saturday indicated that gas price revision may happen well before October 1.
The Cabinet Committee on Economic Affairs had on June 25 deferred a decision on raising gas price based on a formula approved by the UPA government by three months.
This was done to hold consultations with all stakeholders keeping public interest in mind. “We will hold consultations with all stakeholders and experts on the issue. We have an open mind. The government has taken three months’ time (to decide on the issue) but a decision can happen even before October 1,” he said.
Pradhan indicated that no new expert committee would be appointed for the purpose of review. The formula, based on Rangarajan panel recommendation, would have led to prices of gas, which is used mainly for power and fertiliser production, more than doubling to around $8.8 per million British thermal unit.
Every dollar increase in gas price will lead to a Rs 1,370 per tonne rise in urea production cost and a 45 paise per unit increase in electricity tariff. There would be a minimum Rs 2.81 per kg increase in CNG price and a Rs 1.89 per standard cubic metre hike in piped cooking gas.
Pradhan said the Rangarajan formula had certain anomalies which the new government will look to fix keeping the interest of consumers in mind.
If the Rangarajan formula would have been implemented, power cost would have gone up by over Rs 2 per unit and CNG rates by over Rs 12.6 per kg considering a $4.5 dollar increase in gas rates. Besides, piped cooking gas price would have gone up by Rs 8.50 a unit.
‘No hike in kerosene, LPG prices for now’
New Delhi: Ruling out any immediate hike in prices of LPG and kerosene, oil minister Dharmendra Pradhan on Saturday said the new government will continue with the policy of subsidising commonly used cooking fuels.
“There will no increase in LPG and kerosene prices for now. We will continue with the extant pricing policy,” he said here.
In addition, the NDA government will also not disrupt the UPA government’s policy of increasing diesel price by up to 50 paise a litre every month.
“The (Narendra) Modi government has come to power riding on hopes of millions of poor and this government will work keeping their interest in mind,” he said.