PM Narendra Modi on Sunday met petroleum minister Dharmendra Pradhan to discuss the crucial gas price hike issue. This is the second meeting between the two in three days. The two leaders earlier on Friday held nearly five hours of discussion on issues facing energy sector, the two leaders again met with finance minister Arun Jaitley also joining in.
Sources said at the Friday meeting the gas price revision was flagged as one of the immediate decisions that the new government needs to take to revive investor interest in the stagnant oil and gas sector. While the new government is keen to take an early decision on the issue, it may be looking at moderating the proposed increase - from current USD 4.2 per million British thermal unit to USD 8.4, they said adding a new rate may be announced as early as this week.
Oil and gas producers say the current USD 4.2 per million British thermal unit rate is not enough to help produce from new finds in deep sea, but a new formula that had been approved by the previous government will result in increase in electricity tariff, urea cost, CNG rates and piped cooking gas price. Given that inflation is already high and recent rise in food prices in anticipation of below-normal monsoon will add to it, the new government is debating if gas rates should be revised now and add further to inflation, they said.The new government, sources said, is mulling if the Rangarajan formula approved by the previous UPA government for pricing of all domestically produced natural gas, should be tweaked or certain modifications made in its implementation.
Sources said at the Friday meeting the gas price revision was flagged as one of the immediate decisions that the new government needs to take to revive investor interest in the stagnant oil and gas sector. While the new government is keen to take an early decision on the issue, it may be looking at moderating the proposed increase - from current USD 4.2 per million British thermal unit to USD 8.4, they said adding a new rate may be announced as early as this week.
Oil and gas producers say the current USD 4.2 per million British thermal unit rate is not enough to help produce from new finds in deep sea, but a new formula that had been approved by the previous government will result in increase in electricity tariff, urea cost, CNG rates and piped cooking gas price. Given that inflation is already high and recent rise in food prices in anticipation of below-normal monsoon will add to it, the new government is debating if gas rates should be revised now and add further to inflation, they said.The new government, sources said, is mulling if the Rangarajan formula approved by the previous UPA government for pricing of all domestically produced natural gas, should be tweaked or certain modifications made in its implementation.