The government has decided not to hike gas prices from 1 April following objections raised by the Election Commission.
According to CNBC-TV18 sources, the government has deferred the gas price saying that they have no choice now following EC's notice. "The new government will have to take a call on gas pricing now," sources told CNBC-TV18.
The news comes as a disappointment to oil companies.
Oil and Gas expert, Kirit Parekh, told CNBC-TV 18, "I cannot understand the logic of Election Commissioner.If their idea is not to interfere in the elections, this isn't the right thing to do. This decision is a disaster for the country."
Parekh said that the EC should have kept national interest in focus.
The government had approved of implementing the Rangarajan formula for gas producers in the country, which could double the price from the current $4.2 per unit.
However, the formal approval required to be vetoed by the EC as the model code of conduct, which bars governments from taking certain decisions, has come into force ahead of the upcoming national elections.
TheSecretariat of Election Commission in its notice to the government said today that gas pricing hike could potentially be a violation of poll conduct.
The decision to hike the price of gas itself has come under attack from political players such as the Aam Aadmi Party chief Arvind Kejriwal and is also the subject of litigation.
RS Sharma, former CMD, ONGC told CNBC-TV18 that this is a big setback to oil companies.
"I am extremely disappointed. EC should have applied their mind more objectively," he added.
Meanwhile, a PTI report yesterday said that the Reliance Industries , one of the major producers of gas in the KG D6 block off the Andhra cost, has proposed a pricing formula that will increase the price 10 percent higher compared to the initial estimates. The company has proposed to price gas on the basis of gross calorific value (GCV) instead of net calorific value (NCV) as is the practice globally and which was the practice earlier in India too.
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Updated Date: Mar 24, 2014 20:55:56 IST