CCEA defers decision on natural gas price hike
21 Jun 2013
The cabinet committee on economic affairs (CCEA) today deferred a decision on a proposal to increase price of domestically-produced natural gas by a steep 60 per cent to to $6.775 per million British thermal unit (mmBtu) from the current $4.2 mmBtu as minister of petroleum and natural gas M Veerappa Moily was away on an official tour.
Moily's proposal to raise gas prices by a steep 60 per cent, which would result in a steep rise in electricity tariff, urea manufacturing cost as well as CNG rates, was widely criticised as aimed at favouring Reliance
Industries, which has been lying low over the past few years with decling production of natural gas.
The ministry of petroleum and natural gas had moved a cabinet note for an across-the-board hike in gas prices and the CCEA was expected to consider it on Wednesday.
However, the CCEA, "deferred a decision", on the issue, as Moily was attending the meeting chaired by Prime Minister Manmohan Singh.
Moily is in Tripura for the inauguration of ONGC's power plant by President Pranab Mukherjee.
As the gas price hike is being opposed in some quarters as it would lead to a rise in the cost of electricity generation and urea production, there is speculation that the proposal may be referred to a ministerial panel for further deliberations.
The CCEA also deferred a decision on the presentation of a status report on implementation of ethanol-blend petrol programme.
