news details |
|
|
| Hectic parleys on gas price continue in PMO | | | Agencies
NEW DELHI, June 23: For the second day in succession, hectic top-level parleys continued on Monday to hammer out a more palatable increase in natural gas prices that would boost production and not impose a heavy burden on consumers.
Finance minister ArunJaitley and Oil Minister DharmendraPradhan, who met Prime Minister NarendraModi on Sunday, were in the Prime Minister's Office again on Monday to discuss possible tweaks to the Rangarajan price formula, under which the price of gas would rise to $8.8 from July from $4.2 currently.
Sources said the new government was looking at making some changes in the previous United Progressive Alliance-government approved Rangarajan price formula, which will result in a steep rise in the prices of electricity, urea, CNG and piped cooking gas.
While the new government is keen to take an early decision, it doesn't want to add to already high inflation, which may accelerate due to a below-normal monsoon and a spike in oil prices in the aftermath of the Iraq crisis.
Every dollar increase in gas price will lead to a Rs. 1,370 per ton rise in urea production cost and a 45paise 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.
If the Rangarajan formula is implemented without changes, power tariff will rise by about Rs. 2 per unit and CNG rates will jump by over Rs. 12 per kg in Delhi.
Sources said replacing or removing some elements of the formula to bring the revised rate to USD 7 per million British thermal units, or at best USD 7.5, are among the options being explored.
Another possibility is to allow higher prices only on output that exceeds current production, or on production from fields discovered under the New Exploration Licensing Policy such as the Reliance Industries-operated KG-D6 fields. This would exclude state-owned firms including ONGC, which produce gas from pre-NELP blocks, from the revision.
Keeping state firms out of the price revision would mean there will be no hike in CNG and piped cooking gas price because their input comes from ONGC fields.
No KG-D6 gas is supplied to power or CNG companies and the new rate would make its deepsea finds viable. |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
|
 |
|
|
