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Weeks after implementation of a contentious gas pricing formula was put off by three months, Oil Minister Dharmendra Pradhan today indicated that gas price revision may happen well before October 1.
The Cabinet Committee on Economic Affairs had on June 25 deferred a decision on raising gas prices based on a formula approved by the previous UPA government by three months. This was done to hold consultations with all stakeholders keeping public interest in mind.
"We will hold consultations with all stakeholders and experts on the issue. We have an open mind. The government has taken three months time (to decide on the issue) but a decision can happen even before October 1," he said here.
The formula, based on Rangarajan panel recommendation, would have led to prices of gas, which is used mainly for power and fertiliser production, more than doubling to around USD 8.8 per million British thermal unit.
Every US dollar increase in gas price will lead to a Rs 1,370 per tonne rise in urea production cost and a 45 paise 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.
Pradhan said the Rangarajan formula had certain anomalies which the new government will look to fix keeping the interest of end-consumers in mind.
If the Rangarajan formula would have been implemented, power cost would have gone up by over Rs 2 per unit and CNG rates by over Rs 12.6 per kg considering a USD 4.5 dollar increase in gas rates. Besides, piped cooking gas price would have gone up by Rs 8.50.
Pradhan indicated that no new expert committee would be appointed for the purpose of review.
The UPA's pricing formulation had been challenged in the Supreme Court and an FIR is pending in Delhi's Anti Corruption Bureau on the issue.
Also, the Parliamentary Standing Committee on Finance and the Standing Committee on Petroleum had made adverse comments on the formula.