The left parties on Monday accused the Centre of planning to go ahead with the proposed hike in natural gas prices without consulting States or the related Ministries. They said the move was aimed at benefitting Mukesh Ambani-owned Reliance Industries limited (RIl).
Demanding a Group of Ministers to examine the issue, a joint statement issued by the CPI(M), CPI and RSP questioned the hurry of the Centre to push for a double-fold hike in gas price from the existing $4.2 per mmbtu (Million Metric British Thermal Units) to $8.4 per mmbtu, effective only in April 2014.
With RIl being the direct beneficiary of the hike, the left had reason to believe that the decision would cause windfall profits to the corporate house. “The Government is under duress of a particular corporate house,” CPI leader Gurudas Dasgupta said, in an indirect reference to RIl. He was addressing a Press conference along with CPI(M) leader Sitaram Yechury and RSP leader Abani Roy.
The Government-appointed Rangarajan Committee has suggested a price of $8.4 mmbtu from April 2014. The Petroleum Ministry, Finance Ministry and Planning Commission are insisting on a price much higher than the Rangarajan formula, which is being opposed by the Ministries of Power and Fertilizers.
With agriculture and power sectors, the two major consumers of natural gas, to be worst hit by this move, Dasgupta said that the proposed hike would result in an increase of `2 per unit in power tariff and `6,000 per ton increase in price of fertiliser. The burden of subsidy to be borne by the Government would shoot up to `1.50 lakh. In the event, the price increase is not offset by subsidy, the hike would “cripple the economy, especially the agriculture sector, and lead to greater agrarian distress and increase the incidence of farmers' suicides,” Dasgupta added.
Asking the Government to explain its “hurry” on the matter, CPI(M) leader Sitaram Yechury said that the appropriate forum to discuss the matter is Parliament and any increase in gas price should be taken up in the upcoming Monsoon Session.
Terming the hike as “completely unjustified”, the joint statement by the CPI, CPI(M) and RSP said: “We demand that any price increase should be kept in abeyance and the Government should come out with full facts and figures and have a debate with all stakeholders before it pushes ahead with this move.”
Dasgupta, who in the past had questioned the Government's complicity for playing into the hands of RIl, asked: “Why is the Government in a hurry to pass this proposalIJ Why is there no GOM (Group of Ministers) on the matterIJ Why have the States not been consulted on the issueIJ Why is the calculation (of gas prices) being done in dollar termsIJ”
With the decline in the Rupee, RIl is getting the benefit as it is getting the price close to $14 per unit, he claimed. In July 2010, the Government had hiked gas prices from $1.8 per unit to $4.2 and was now proposing to raise it to $8.4. Yechury said the price in the US was $4.32, in Pakistan $4.98 and in Bangladesh $0.78.
“The ONGC’s Administered Price Mechanism (APM) already covers the expenditure incurred on this gas,” he said, adding that the logic of international price parity was completely unacceptable as it should be based on production costs.
Dasgupta alleged that “by increasing the price, the Government will take a disastrous step due to the arm-twisting by this corporate house which is deliberately reducing production that now stands at 19 per cent of the desired level.”
Responding to Petroleum Minister Veerappa Moily’s charge that Dasgupta was supporting the “import lobby” and “vested interests” by opposing a price hike, the CPI leader said the only importer of gas were two public sector undertakings — GAIl and Pll.
“Our vested interest is the future of the country and to maintain the interest of the people,” Yechury responded. He appealed to all Opposition parties to unite in national interest and prevent the Government from effecting further hike in gas prices.