Moily says no rethink on gas price hike decision

Government's controversial decision to double natural gas price will remain unchanged, Oil Minister M Veerappa Moily said despite Finance Ministry pushing for maintaining old rates for some of the gas of Reliance Industries.
"There is no thinking on part of the government for any review or reconsideration of the decision of the CCEA. Let me make it very clear. There is no confusion, there is no vagueness. And I don't think there is scope for any interpretation whatsoever," Moily told a news conference here.
Ever since the government decision was announced on June 27, there has been criticism that it was made to benefit Mukesh Ambani-led RIL.

Finance Ministry on July 4 wrote to Oil Ministry asking it to take appropriate action on suggestions made in two media reports for putting a cap up to which rates can be raised, and RIL being forced to sell the quantity it had committed but failed to deliver in past three years at old rate of USD 4.2.
"The Office Memorandum dated July 4 from the Department of Expenditure, Ministry of Finance... Has enclosed two editorials of the newspapers and illustrated some of the issues in these editorials. That cannot be taken as objective opinion of Ministry of Finance. It cannot (also) be considered as query raised by Ministry of Finance," Moily said.

The Cabinet Committee on Economic Affairs (CCEA) had on June 27 approved pricing of domestic gas at an average of cost of imported LNG into India and international hub rates. The price of gas when this formula comes into effect on April 1 could come to about USD 8.4 per million British thermal unit.

Moily said his ministry had taken opinion of Finance Ministry twice and it was incorporated in the CCEA note. Finance Ministry in comments did not raise any issue of capping price or RIL being asked to sell gas at old rate.
"I don't think there is another interpretation open to it. It (the CCEA decision) has been done after due deliberation and I think it has taken lot of time and deliberations and once considered view has been taken, we will stick to that," Moily said.

Ruling out capping increase in rates, the minister said: "The CCEA decision stands. There is no change. And government, not just Ministry of Petroleum and Natural Gas, is not contemplating any changes in it.