Oil Minister defers gas price decision till June-end

Leaving the onus of crucial decision taking onto the next government, Oil Minister Veerappa Moily has decided to hold gas prices at the current level of $4.2 per unit until the end of June and not allow retrospective revision of rates. The new prices will now be applicable only from July 1, 2014. This development is the latest in a series of moves undertaken by various authorities to defer the increase in gas prices since June last year, when the Cabinet first approved the Rangarajan formula, which if applied would have doubled gas rates from April 1, 2014. Back in December, Cabinet reviewed its June decision and decided to allow Reliance Industries to up gas prices, provided it furnished a bank guarantee which would be en-cashed, if the company lost an arbitration case against the government. But with AAP turning gas pricing into a poll campaign issue and writing to the Election Commission, the poll panel asked the government to hold the new pricing regime till polling ended. Now, the prime minister's office has sought the oil ministry for a status report on gas pricing. According to the new formula, the gas price would be doubled to about $8.3 per unit from $4.2 at present. But, while the decision was taken in June 2013, the implementation date was set for April 1, 2014 to ensure 'level field' among all players. However, by delaying implementation, the government has allowed the policy decision to be linked to issues arising out of RIL's failure to meet the gas supply target and also given fodder to the Opposition's charge, voiced by AAP and Dasgupta, that the price was being raised to benefit Reliance