Gas price decision to fall on new Govt

In all probability, the new Government will have to decide on the new price for domestically produced gas, even though the decision to defer the announcement of rates is only till the model code of conduct for ongoing elections is in force.

The new price, which is expected to be almost double the prevailing price of $4.2/unit (gas is measured in million British thermal units), was to come into effect from April 1.

Allegations have been made that the Government was favouring corporate house Reliance Industries when deciding to notify the new gas price as soon as the model code of conduct is lifted (on May 17).

Sources associated with the gas pricing issue said “no official will like to take a decision till there is clarity on the Government”. Expectations are that if it is a clear mandate, then the Election Commission could notify the formation of new Lok Sabha by May 18 or 19.

“Under these circumstances, no one would like to take a decision in a hurry… and in likelihood, the new Government will take a call on this sensitive issue,” another official said.

Countering the allegations made by Gurudas Dasgupta, a senior leader of the Communist Party of India, the Minister for Petroleum & Natural Gas, M Veerappa Moily, said the revised price was applicable for all domestically produced gas, not just from the Reliance Industries-operated KG-D6 block.

Moily said, “According to the revised pricing guidelines, the Government has to notify gas pricing on quarterly basis using the date for the pervious four quarters with a lag of one quarter. When the Government was in the process of notifying the price for the quarter April-June 2014, the General Elections were announced and mode code of conduct came into force on March 5.”

He said the permission of Election Commission had been sought, which said that the proposal should be deferred till the model code of conduct was in force. “It is obvious that once the model code of conduct is lifted, this order of deferment by the Election Commission will cease to exist and the Cabinet Committee on Economic Affairs decision will naturally come into force…I rightly ordered that after the model code of conduct is lifted, price may be announced for the quarter July-September 2014 and also for the quarter April-June 2014…,” Moily said.

However, it remains to be seen whether Moily’s enthusiasm will be shared by his Ministry’s officials.