AAP welcomes EC's order to defer gas price hike, says 'major relief to common man'

The Aam Aadmi Party welcomed the Election Commission’s direction to the central government to defer till elections the decision to double natural gas prices from April 1, saying it “comes as a major relief for the common man”.

“The EC’s decision comes as a major relief for the common man who would otherwise have suffered under the impact of the hike in transportation and fertiliser costs, which would have also pushed up the prices of all essential commodities,” said a statement issued by the party late tonight.

“AAP congratulates the people of the country for having supported the party stand on the issue,” the statement reads.

This “dishonest” decision of the UPA government was solely aimed at providing huge undue benefits to RIL and would have resulted in a loss of more than Rs. 54,500 crore to the national exchequer, the statement reads.

More from Elections

It is boots on the ground, and not bots, that win poll battles Tamil Nadu politicos get a 'Sanion' makeover on Facebook

Alleging that the UPA government has violated the Model Code of Conduct, AAP said the EC’s decision within four days of the party’s National Convenor sending a letter to it shows that the move was in a hurry to benefit RIL.

AAP said the gas pricing issue has exposed the “nexus” between RIL and Congress and BJP.

“The gas pricing issue has not only exposed the Congress but also the BJP and particularly its prime ministerial candidate Narendra Modi who has been maintaining a mysterious silence on this crucial issue… In the coming days, AAP will further expose the nexus between RIL and Congress-BJP combine,” the statement reads.

The Economic Times quotes Arvind Kejriwal as saying,"…if Congress comes to power, gas prices will be $8 per unit, if BJP comes to power, they will be $6 per unit, but if AAP comes to power, prices will be $3-4 per unit," adding that reliable sources have told the AAP leadership that the Gujarat State Petroleum Corp wanted the UPA to hike gas prices.

After the EC decision, the UPA government is left with no option but to leave the implementation of the Rangarajan pricing formula that would have hiked gas price from current $4.2 per million British thermal unit to $8.3, to the new government.

The new government may not want to implement the formula in entirety or in part as the formula had been severely criticised in several quarters including user industries like fertiliser and power, for including the cost of importing gas (LNG) in determining rates for domestically produced gas.

The deferment, however, will not have any bearing on 85 percent of the gas produced and sold in the country as producers like ONGC will continue to sell the fuel at existing rates and valid contracts.

It will impact only Reliance Industries, which produces less than 15 percent of domestic gas, as its current sales contracts will have to be extended beyond expiry of their term on March 31.

The decision to hike gas price, which was keenly sought by RIL and its partner BP plc of UK, was opposed by AAP party which alleged that it was taken to favour the Mukesh Ambani firm.

CPI leader Gurudas Dasgupta and an NGO had filed petitions in the Supreme Court challenging the rate hike. The apex court is to resume hearing on the issue from today.

Though the decision to revise gas prices from April 1, 2014 was first taken in June 2013 and notified on January 10 this year, the Oil Ministry had approached Election Commission for permission to announce the new price.

The EC last evening wrote to the Oil Secretary Saurabh Chandra saying since the matter was sub-judice in the Supreme Court, a decision on revision in gas prices may be deferred.

The decision would mean that the revision is delayed for at a least few months as the new government may like to review the entire decision and take an independent view of the same.

Barclays estimates that gas producers to garner $4 billion in revenue from higher gas prices from 2014-15 while government will rake in an additional $505 million from royalty, profit share, taxes and dividend.

With inputs from PTI