CCEA defers decision on natural gas price hike

CCEA defers decision on natural gas price hike

The Cabinet Committee on Economic Affairs (CCEA) today deferred a decision on a proposal to hike natural gas prices by a steep 60 per cent as Oil Minister M Veerappa Moily was away on an official tour.

Moily's proposal to raise gas prices to USD 6.775 million British thermal unit (mmBtu) from current USD 4.2 mmBtu, which would result in a steep rise in electricity tariff, urea manufacturing cost as well as CNG rates, was listed for consideration of CCEA.

The CCEA, however, "deferred a decision", said a senior minister attending the meeting chaired by Prime Minister Manmohan Singh.

The Oil Ministry had moved a note for an across-the-board hike in gas prices for consideration of CCEA on Wednesday and it was listed as number 7 among the eight items the Cabinet sub-committee was to consider.

However, with Moily in Tripura for the inauguration of ONGC's power plant by President Pranab Mukherjee, the CCEA deferred a decision.

The gas price hike, while triggering investment in gas hunt in the country and the resultant production hike, is being opposed in some quarters as it would lead to a rise in cost of generating electricity and urea production.

Owing to the opposition there is speculation that the proposal may be referred to a ministerial panel for further deliberations.

The minister said another Oil Ministry's agenda - presentation of a status report on implementation of ethanol-blend petrol programme, too was deferred by CCEA.