New Delhi, June 5 (PTI): The government is likely to hike natural gas rates from July 1 after a new price formulation is approved by the cabinet, a top oil ministry source said today.
The first increase in natural gas prices, based on a formula suggested by a panel headed by C. Rangarajan, was to be originally effective from April 1. However, before a new rate could be unveiled, the general elections were announced and its implementation got deferred.
“It (gas price revision) is an issue which needs attention. Decision needs to be taken before July 1,” the source said.
On April 21, the ministry had told Reliance Industries that a new rate would be announced by July 1. RIL was made to sell natural gas from its eastern offshore KG-D6 fields at the old rate of $4.2 per million British thermal unit even after its term had expired.
“We had told RIL that the earliest possible date for applying the revised price is July 1... we have to announce a new price before that,” he said.
The ministry will announce a new rate once its gets clarity from the top on the implementation of the Rangarajan formula, which would double the gas price. “Perhaps we may have to go to the cabinet... we would have more clarity on the issue by next week, say by Tuesday,” the source said.
It is felt that the formula needs some adjustment or the government needs to take steps to protect the interests of users in the power and fertiliser sectors.