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Jaya alleges natural gas price hike to help 'a large conglomerate'

Says it would give huge profit to this large firm, in lieu of punishment it received for producing lesser gas than it was guaranteed to produce from KG D-6 basin

Gireesh Babu  |  Chennai 

Chief Minister has expressed her strong objection against the decision of Union cabinet approving price increase for

The Chief Minister alleged that the move is to support a major business conglomerate and the decision will have a major impact on the industries like fertiliser and power generation companies which are using gas.

The price hike would give huge profit to this large firm, in lieu of the punishment it received for producing lesser gas than it was guaranteed to produce from KG (Krishna-Godavari) D-6 basin, she added.

While she did not mention the name, recent reports clearly shows that it was the Mukesh Ambani-led which was fined Rs 6,600 crore by the oil ministry for not meeting the obligations of gas output.

She said that the cabinet committee's decision announcing gas pricing policy based on the report follows a method which calculates the average price of imported into India based on the price of in the trade organisations in North America, Euroe and Japan.

In a statement issued today, Jayalalithaa said, "If you calculate based on this, the price of natural gas would be fixed at $8.4 per million metric British thermal unit (mmBtu) as against the $4.2 at present. Saying that the hike in price would help the country to become self sufficient in natural gas generation, this decision is to support a major industrial conglomerate."

At present, almost 81% of the fertiliser companies manunfacturing Urea are using natural gas for their production. With the shortage in natural gas has hindered production of 28,000 MW of electricity.

The price increase would lead these companies to stop production of Urea and power in future or the price for these produces would go up, which would have an impact on the common people, she added.

She added that the decision has been taken by a government which has a tenure only up to May, 2014. She questioned the moral responsibility of the centre to take the decision, in this context. It would be proper for a new government after the election, to fix the price. She said that her party, All India Anna Dravida Munnetra Kazhagam (AIADMK) would take steps against this decision, if the centre is not withdrawing the policy.

The Chief Minister also alleged that the centre, which has been into policy paralysis for long, has suddnely started issuing policies, and has brought in policy overdose. However, the decisions are affecting the common people, she added stating that the price deregulation in fuel, putting a ceiling on cylinders, divestment in Public Sector Undertaking (PSU) and opening investment doors for the multi brand retail firms into India through Foreign Direct Investment.

She added that the artificial price fixation method for natural gas based on international trends would affect the Indian companies.

First Published: Mon, July 01 2013. 16:53 IST