Power Engineers oppose natural gas price hike proposal

Decision would result in over Rs 15,000 cr additional profits to Reliance Industries that extracts gas from KG Basin

All India Power Engineers Federation (AIPEF) today opposed the proposed doubling of natural gas prices from April 1, 2014 as announced by the central government.

Federation secretary general Shailendra Dubey warned that power tariffs would move north following the decision, while it would also be detrimental for the domestic fertiliser companies.

He has urged the Centre to reverse the natural gas price hike proposal and even called upon the opposition leaders viz. Sushma Swaraj and Arun Jaitley to raise the vital issue in Parliament.

Last year in June and September also, the federation had raised this issue, when the cabinet committee on economic affairs had recommended the price hike proposal. He claimed that the decision would result in over Rs 15,000 crore additional profits to Reliance Industries, which extracts gas from KG Basin.

Dubey said the cost of production would rise by 25 paise per unit in gas-based power plants with the proposed natural gas price hike from April, which he also termed as illegal.

The proposed hike would set natural gas price from 4.2 dollar per MMBTU to 8.4 dollar per MMBTU, which the Federation maintained would peg the gas price in India as the second steepest priced in the world after Europe, where the effective price is 8.8 dollar per MMBTU.

He alleged complicity of the Centre in the whole episode, wherein Reliance was not supplying sufficient gas to power plants. As a result, 12 plants were lying idle and production was sub-optimum at 19 other plants, totaling 15,000 Mw, he underlined. Dubey claimed there was the provision to slap fine on the company for not supplying gas as per contract, but the Centre was dithering on the matter.