Election Commission asks OilMin to defer doubling of gas price

The Election Commission today asked the government to defer till elections the controversial doubling of natural gas prices for companies like RIL from next month, a move that may torpedo the entire decision for atleast a few months.
"...After taking into account all relevant facts, including the fact that the matter is sub-judice in the Hon'ble Supreme Court, the Commission has decided that the proposal may be deferred," it wrote to Oil Secretary Saurabh Chandra this evening.
After the EC decision, the UPA government is left with no option but to leave the implementation of the Rangarajan pricing formula that would have hiked gas price from current USD 4.2 per million British thermal unit to USD 8.3, to the new government.

The new government may not want to implement the formula in entirety or in part as the formula had been severely criticised in several quarters including user industries like fertiliser and power, for including the cost of importing gas (LNG) in determining rates for domestically produced gas.
The deferment, however, will not have any bearing on 85 per cent of the gas produced and sold in the country as producers like ONGC will continue to sell the fuel at existing rates and valid contracts.
It will impact only Reliance Industries, which produces less than 15 per cent of domestic gas, as its current sales contracts will have to be extended beyond expiry of their term on March 31.

The decision to hike gas price, which was keenly sought by RIL and its partner BP plc of UK, was opposed by AAP party which alleged that it was taken to favour the Mukesh Ambani firm.
AAP leader Arvind Kejriwal, who had during his brief stint as Delhi Chief Minister ordered an FIR against Oil Minister M Veerappa Moily and RIL head Mukesh Ambani and others for allegedly conspiring to double gas prices, had asked EC not to approve revision in rates.
CPI leader Gurudas Dasgupta and an NGO had filed petitions in the Supreme Court challenging the rate hike. The apex court is to resume hearing on the issue from tomorrow.