Following stiff opposition from within, the government has asked the power and fertilisers ministries to submit proposals that can help neutralise the impact of the recent doubling of natural gas prices on the cost of power and fertilisers — and indirectly, food prices.
Petroleum and natural gas Veerappa Moily confirmed to HT that both his ministry as well as finance have promised full support to the power and fertiliser ministries towards minimising the impact of the hike on end-users in the two sectors. “The administrative ministries of power and finance have been asked to work out the modalities and submit them to us,” Moily said.
Another senior UPA minister pointed out that the Centre is already providing direct subsidies on LPG (cooking gas) by paying these into consumer accounts while charging the market price of gas. “The same model or something else to benefit consumers and weed out the impact of a hike in natural gas prices can be worked out for consumers of power and fertiliser sectors,” the minister said.
Moily refused to comment on this and said, “We will look into the proposals once we receive them.”
As reported by HT, at least two ministers raised concerns during Thursday’s meeting of the Cabinet Committee of Economic Affairs (CCEA) about the inflationary impact of doubling natural gas prices to $8.4 per unit from April 1 next year.
Finance minister P Chidambaram has already hinted at supporting core sector industries such as power and fertilisers. “At the moment we are only fixing the price of gas payable to producers... a higher gas price will indeed have impact on the consumer, but those prices are not being fixed today,” he had assured after the decision to hike gas prices. “That can still be decided between now and April 1.”