【New Delhi】The Cabinet Committee on Economic Affairs (CCEA) on 25th June decided to defer a politically sensitive issue on the pricing of domestically produced gas by three months.
The previous UPA government had decided to double gas prices to $8.4 per million British thermal units (mbtu) of gas from April 1, but deferred its implementation by three months in view of the general elections. The revision in gas prices would have come into effect from July 1.
A day after it rolled back a fare hike for suburban trains, the NDA government failed to take a decision on the contentious gas price hike. A decision on gas prices is critical since $8-10 billion of investments from explorers such as Reliance Industries (RIL) are riding on it.
Through the day, the market was abuzz with speculation on what the price would be. The Sensex and Nifty plunged 0.9 per cent at the closing session on Thursday due to heavy selling in oil & gas stocks.
○Iraq crisis could spoil govt’s oil subsidy math
【New Delhi】The rise in global crude prices due to tensions in Iraq could potentially throw a spanner in the Narendra Modi-led NDA govt's subsidy rationalisation plans.
With each dollar rise in price of Indian basket of crude increasing the petroleum subsidy by around Rs 4,500 crore, officials told FE that as of Tuesday, the estimated petroleum subsidies for FY15 is likely to increase by Rs 7,000-8,000 crore if the Indian basket prices stay at the current level of $110-111 a barrel of crude for the rest of the year. The FY15 petroleum subsidy estimate of about Rs 1.12 lakh crore was calculated at an average of $107/barrel with an exchange rate of 60 for rupee against the dollar.
○Govt to slap additional penalty of $578 mn on RIL
【New Delhi】The government plans to impose an additional penalty of $578 million on Reliance Industries Ltd (RIL) for producing less-than-targeted natural gas from its eastern offshore KG-D6 block.
RIL, which disputed the levy and initiated arbitration against the government, did not respond to an e-mail seeking comment.
【News source】
CCEA defers gas price revision
Gas price revision deferred by 3 months
Decision on gas price increase put off for 3 months
Govt fails to walk the talk, dithers on gas price hike
Gas price hike deferral, F&O expiry: Sensex plummets 251 points
Iraq crisis could spoil Narendra Modi govt’s oil subsidy math
Govt to slap additional penalty of $578 mn on RIL
Additional penalty of $578 mn for RIL
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