The Union Cabinet will consider the impact of proposed hike in natural gas prices on power tariff and fertiliser subsidy before taking a decision on increasing the rates, Finance Minister P. Chidambaram said today.
Commenting on CPI leader Gurudas Dasgupta's allegations that a "gigantic scam" was in the making in the Oil Ministry's proposal to hike gas prices, Chidambaram said the Cabinet will consider all views carefully before taking a decision.
The Oil Ministry has moved a Cabinet note proposing a hike in prices of natural gas produced by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) as well as private firms like RIL to USD 6.7 per million British thermal unit from current USD 4.2 per mmBtu.
The hike proposed is as per the formula suggested by a panel appointed by Prime Minister Manmohan Singh under his economic adviser C Rangarajan.
Chidambaram said though he had not seen the Oil Ministry's Cabinet note, the report of the Rangarajan panel was "more or less in the public domain".
"Why did we appoint the Rangarajan Committee? The Rangarajan Committee was appointed to look into the matter. The Rangarajan Committee has given its report. That report is more or less in the public domain.
"So, why do we appoint a committee? Why do we take a report and why do we put it out in public domain, if there is no intention or there should be no intention to act upon the report," he said.
Dasgupta demanded sacking of Oil Minister M Veerappa Moily for allegedly doling out favours to Reliance Industries (RIL) in form of price rise despite objections from power and fertiliser ministries.
Chidambaram said all views would be considered by the Cabinet before taking a final decision. "I am sure, all views will be eloquently presented in the Cabinet and all views will be carefully considered."
The hike in natural gas price by USD 1 would result in Rs 3,155 crore per annum hit on fertiliser plants for producing 23 million tonnes of urea this fiscal and Rs 4,144 crore a year for 32 million tonnes of urea production from 2017-18.
The impact of every US dollar increase in gas price would be about Rs 10,040 crore per annum on the power sector for 28,000 MW of electricity generating capacity.