The Cabinet Committee on Economic Affairs (CCEA) Wednesday deferred a decision on the new price for domestic natural gas awaited by producers by three months, pending a review of the price approved by the previous government."The cabinet has decided there is need for comprehensive discussion and consultation with all stakeholders keeping in mind the interests of the common man. We have deferred the matter for three months," Petroleum Minister Dharmendra Pradhan told mediapersons here after the CCEA meet.The meeting was called to consider the new gas price notified by the UPA government which could not be implemented owing to the election model code of conduct.In April, the petroleum ministry had told Reliance Industries, which is supplying gas from its eastern offshore fields at the old price of $4.2 per unit even after it expired on March 31, that the new rate will be implemented from July 1.
The Election Commission had then asked the government to defer announcing the new price of natural gas produced by companies till after the general elections had been completed. After assuming office, the new government has been exploring whether modifications can be made in the implementation of the Rangarajan formula for pricing of all domestically produced natural gas. Prime Minister Narendra Modi met the petroleum and finance ministers last Sunday in the matter.The Rangarajan formula recommends pricing rates at an average cost of importing liquefied natural gas (LNG) into India and rates prevailing at international hubs in the US and Britain as well as price of gas imported into Japan.There has been opposition to the formula from various quarters on account of its likely effect on electricity tariff, urea cost, CNG rates and piped cooking gas price.