Gas price hike to push up power tariff for consumer by Re1 a unit: power minister

The government's decision to raise the price of natural gas supplied by state-run Oil and Natural Gas Corporation (ONGC) and Oil India to $4.20 per million British thermal units (mmBtu), is expected to raise power tariff for consumers by a minimum Re1 per kwh, power minister Sushil Kumar Shinde said today.

The central government yesterday announced an over 100 per cent hike in the price of gas supplied by state-run ONGC and Oil India, to bring it on par with the price of gas supplied by private sector Reliance Industries Ltd.

"The power tariff would go up. We have not worked out the details, but it is likely to be about Re1 per unit," Shinde said on the sidelines of a meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci).

The union cabinet also more than doubled the price of gas sold to power and fertiliser units and city gas supply projects to Rs6,818 per thousand cubic metres ($3.818 per mmBtu), from Rs3,200 per thousand cubic metres ($1.79 per mmBtu).

The tariff hike is exclusive of taxes and other levies as also pipeline transportation charges.

In addition, state-run gas marketing and distribution company GAIL India will be allowed to charge 11.2 cents towards marketing margin.

The gas price hike is expected to raise overall power tariff by 2.75 per cent, and the price of compressed natural gas (CNG) for automobiles by up to 20 per cent.

Power tariff in the country is regulated by the Central Electricity Regulatory Commission (CERC) at the central level and state electricity regulatory commissions at the states level.