New Delhi: The Election Commission on Monday asked the government to defer till elections the controversial doubling of natural gas prices for companies like RIL from next month, a move that may torpedo the entire decision for at least a few months.
"...after taking into account all relevant facts, including the fact that the matter is sub-judice in the Hon'ble Supreme Court, the Commission has decided that the proposal may be deferred," it wrote to Oil Secretary Saurabh Chandra in the evening.
After the EC decision, the UPA government is left with no option but to leave the implementation of the Rangarajan pricing formula that would have hiked gas price from current $4.2 per million British thermal unit to $8.3, to the new government.
The new government may not want to implement the formula in entirety or in part as the formula had been severely criticised in several quarters including user industries like fertiliser and power, for including the cost of importing gas (LNG) in determining rates for domestically produced gas.
The deferment, however, will not have any bearing on 85 per cent of the gas produced and sold in the country as producers like ONGC will continue to sell the fuel at existing rates and valid contracts.
It will impact only Reliance Industries, which produces less than 15 per cent of domestic gas, as its current sales contracts will have to be extended beyond expiry of their term on March 31.
The decision to hike gas price, which was keenly sought by RIL and its partner BP plc of UK.
CPI leader Gurudas Dasgupta and an NGO had filed petitions in the Supreme Court challenging the rate hike. The apex court is to resume hearing on the issue from tomorrow.
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