Decision to hike gas price "disastrous": CPI

CPI today termed as "suicidal" the government's decision to hike prices of natural gas to near double from April 1 next year and said it will lead to a "dangerous situation of aggravating slowdown in the country and will further inflame the inflationary market".

CPI today termed as "suicidal" the government's decision to hike prices of natural gas to near double from April 1 next year and said it will lead to a "dangerous situation of aggravating slowdown in the country and will further inflame the inflationary market".

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It alleged the decision was taken "under pressure from a corporate house" and will lead to further increase in cost of industrial production and perpetuation of agricultural crisis.

"This is a diastrous decision. At least four cabinet members had opposed. Even a section of the bureaucracy was not in favour of giving in to the pressure of the corporate house," claimed CPI leader Gurudas Dasgupta.

He said that with the near doubling of gas prices from the present USD 4.2/mmBtu to 8.4/mmBtu, the total outgo is likely to be around 8 billion dollars in addition.

"Huge subsidy will be required to maintain the price of fertilizer, which government is unlikely to bear considering the present economic crisis, which means it will be passed on to consumers," Dasgupta said.

"It will increase the industrial cost of production, further aggravating the slowdown, likely to lead to increase in the power units and fertilizers prices and will further inflame the inflationary market," the CPI leader said.