The Government’s decision to increase the price of domestically produced natural gas has not gone down well with the Opposition parties.
Doubling the price of the natural gas will trigger further rise in the prices of fertilisers, power, and cooking gas and will also impact the general price line going northward, BJP spokesperson Prakash Javadekar said.
The Government must spell out the price of the cooking gas cylinder and fertilisers along with power from April 2014. It is estimated that the cooking gas cylinder will cost more than Rs 1,800 in the open market and the subsidised cylinder will be also costly at Rs 1,000 per cylinder.
Chidambaram claims that the power prices will go up by few paise only, he said adding that “this doesn’t hold true, if we calibrate the impact of imported coal prices in the depreciating rupee environment.”
Reliance, which is virtually blackmailing the country by keeping production of natural gas in the KG-D6 gas basin below the stated target till the price is increased, will be the main beneficiary. It is estimated that every dollar increase in gas price will raise Reliance’s profits by at least $74 million.
The hike is irrational even in comparison to gas exporting countries where the price of domestic gas is much lower. For example, in Gulf countries, the price is only $1 per mmBtu, in Egypt $2.57/mmBtu, in Nigeria $0.11/mmBtu, in Australia $5/mmBtu and in Indonesia around $1/mmBtu, the CPI(M) said in a statement.
Under a decontrolled regime, the move will be a pretext for the fertiliser companies to further hike the already exorbitantly priced fertiliser prices. Further, the increases in power tariffs will also hamper irrigation activities.
Given that the Government fixed Minimum Support Prices do not meet even the costs of production for most crops, these increases and hike in transportation costs will destroy livelihoods of millions of farmers, the All India Kisan Sabha said in a statement.