Gas price revision deferred due to state elections: Oil Minister

New Delhi: Government deferred an increase in natural gas price for a third time in view of next month's assembly elections in Maharashtra and Haryana, Oil Minister Dharmendra Pradhan said today.

Yesterday, the Cabinet Committee on Economic Affairs (CCEA) had deferred a decision on revising natural gas prices by 45 days to November 15.

"It was done due to elections," Pradhan said when asked for the reasons for the deferment.

 Gas price revision deferred due to state elections: Oil Minister

Representational Image. Reuters

He, however, did not say if the decision was postponed because of model code of conduct being in place or to avoid the fallout of the price increase on power tariff and CNG rates.

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 (for just the 7 per cent of the nation's power generation capacity based on gas).

Also, 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.

Assembly elections to 288-member Maharashtra assembly and 90-seat Haryana assembly will be held on October 15 and counting will take place on October 19.

Apart from these states, bypolls will be conducted on the same day for five assembly seats in five states -- Arunachal Pradesh, Manipur, Nagaland, Uttar Pradesh and Gujarat.

Byelections for two Parliamentary constituencies in Maharashtra's Beed and Odisha's Kandhamal will also be held on October 15.

The UPA government had in June last year approved a price formula suggested by a panel headed by C Rangarajan and re-confirmed it in December 2013 with certain conditions for Reliance Industries' eastern offshore KG-D6 block.

The formula was to be implemented from April 1, 2014 but before a rate could be notified, general elections were announced and Election Commission asked the then government to defer it till completion of polls.

On June 25, the new BJP-led government deferred it for a further three months as it found doubling of rates as per the approved formula unpalatable.

Earlier Pradhan had told Parliament that a new gas price will be announced by September end.

In August-end, the government constituted a four-member panel of secretaries to review the formula. The committee comprising of secretaries of power, fertiliser and expenditure with additional secretary in the Oil Ministry as its member secretary, last week submitted its recommendation on a new pricing mechanism.


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Updated Date: Sep 25, 2014 15:34:30 IST