Govt rebuts suit-boot remark, says UPA raised gas price to $9

Hitting back at Rahul Gandhi for his 'suit-boot' government comment, Oil Minister Dharmendra Pradhan today said the previous UPA regime had approved a gas price of USD 9 for firms like Reliance Industries without bothering about its impact on the common man.
While the Congress-led government had approved more than doubling of natural gas price to USD 9.2 per million British thermal unit from USD 4.2, the BJP-led NDA in October moderated it to USD 5.61 per mmBtu as it would have had cascading effect on cost of electricity, urea and cooking gas.
"Now, this friend of mine, who has just returned from a holiday, calls my government a 'suit-boot' government. But it was their (UPA) government which had approved a price of more than USD 9 on NCV (net calorific value) basis without looking into purchasing capacity of the country," he said without naming the Congress vice-president.

Speaking at a FICCI Roundtable on Hydrocarbon, Pradhan said, when LNG is available in the spot market at USD 7-8, how can a price of USD 9 be justified.
"If my friend's (governments') order would have been executed, the price on NCV would have been over USD 9 against imported LNG being available at USD 7-8. And they are accusing us of being a suit-boot government," he said.
The higher price fixed "not looking into purchasing capacity of the country and not looking into world models" would have been to the benefit of certain firms, he said.

Yesterday, speaking in Lok Sabha, Gandhi had prised the Modi government of being anti-farmer and pro-industrialists and made repeated jibes playing on the words 'ache din (good days) government' and 'suit-boot sarkar'.

Considering the impact of high gas prices would have had on the common man, the NDA government developed own model wherein the gas price was fixed at USD 5.61 for period till March 31 and has fallen to USD 5.17 this month in step with global trends, Pradhan said.
"The gas pricing formula we evolved balances the wellhead gas price expectations with end users capacity to pay," he said referring to the formula doing a balancing act between expectations of a gas producer and the actual user of the fuel.
Pradhan said the arms-length discovered price of gas from KG basin block of RIL was USD 2.34 per mmBtu but it was abandoned at USD 4.2 per mmBtu rate fixed for first five years of production, which began in April 2009.

"I have spoken to all the four petroleum ministers in the 10 year rule of UPA -- Mani Shankar Aiyar, Murli Deora, S Jaipal Reddy and M Veerappa Moily. And one of them told me that price has come from USD 2.34 (to USD 9)," he said. "Dont accept Gulf of Mexico price in India.