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The Cabinet Committee on Economic Affairs (CCEA) today deferred a decision on a proposal to hike natural gas prices as Petroleum minister M Veerappa Moily was away on an official tour.
The proposal for gas hike was supposed to go before the Cabinet, following consent from finance and fertilizer ministries.
Petroleum ministry was batting for a $6.775 per million British thermal unit hike in gas price and the proposal was likely to be considered before the Cabinet Committee on Economic Affairs (CCEA) today.
Moily had to attend the inauguration of Rs 3,429-crore power project by ONGC in Tripura.
According to the Rangarajan formula, the base price of domestic natural gas was supposed to go up to $8.8 a mBtu from the $4.2 currently applicable for gas produced from Reliance Industries’ KG-D6 and a host of other fields. The fertilizer and power ministries were earlier against any hike in prices would hit both the sectors badly. According to estimates, every $1 increase in gas price will raise annual production cost of fertiliser sector by Rs 2,738 crore. While per dollar increase would impact Rs 10,040 crore per annum for power sector for 28,000 MW of electricity generating capacity.
