The Petroleum Ministry has said that it is not currently considering any fresh proposal to hike natural gas prices and has not received any suggestion from the Finance Ministry asking it to put a cap on the price of the natural resource which are estimated to be in the range of $8.4 per mmBtu from April 1, 2014 onwards, nearly double the current price of $4.20 per mmBtu.
Top Petroleum Ministry sources told The Pioneer that it has not finalised any fresh proposal to hike natural gas prices and even denied having received any recommendation from the Finance Ministry of putting a cap on by how much the natural gas prices can be hiked once the new $8.4 per mmBtu price comes into effect from April next year (as per the recommendation of the C Rangarajan Committee).
According to sources privy to the development, the Petroleum Ministry is of the view that already in June this year, the Cabinet had approved the $8.2 per mmBtu formula which had been suggested by the C Rangarajan panel and this would come into effect from April 1, 2014, and therefore there is no further scope for any more hike in it.
They added that with lok Sabha elections just months away, it would be the prerogative of the new government at the Centre on how to curb new gas prices from going up, once they come into force from April 1, 2014.
The Petroleum Ministry's stand comes in the wake of reports emanating from various sections of the media that it has prepared a draft Cabinet note seeking to allow higher gas price to a particular corporate bigwig.
Maintenance of status quo in terms of gas prices seems to be the modus operandi of the Government, especially after having received a rap on the knuckles from the Parliamentary Standing Committee on Finance headed by senior BJP leader Yashwant Sinha for doubling the gas prices from $4.2 per mmBtu to $8.2 per mmBtu which would have a spiralling effect on the fertiliser and power sectors.
The ministry has even faced allegations of having favoured an influential corporate house for having approved the Rangarajan panel's recommendation. In such a scenario, the ministry claims to maintaining caution on the matter.
The pricing formula suggested by the Rangarajan panel will be effective April 1, 2014 for a period of five years, with the price being revised quarterly.
Prices for each quarter will be calculated based on the 12-month trailing average price with a lag of one quarter (i.e. price for April to June 2014 will be calculated based on the average for 12 months ended December 31, 2013).