The cost of power, compressed natural gas (CNG), piped natural gas (PNG) and fertilizer for farmers is likely to go up substantially in the next few weeks, following the government decision to double the price of APM (Administered Pricing Mechanism) natural gas to $4.20 per million British thermal unit (mBtu).
Tariff hike
Union Power Minister Sushil Kumar Shinde on Thursday gave enough indications that a power tariff hike was imminent in view of the Cabinet's decision and said power generated by gas-based plants would go up by up to Rs.1.20 a unit.
However, a final decision on what the power consumer would have to pay would be taken by State regulatory commissions.
“The hike in the administered gas price will certainly increase the electricity rates because the cascading effect is bound to come on such things,'' Mr. Shinde said on the sidelines of a function here.
He said the cost of generation would go up by 90 paise to Rs.1.20 a unit (kWh) for gas-based power plants. These plants account for only about 10 per cent of the total generation capacity.
The cost of gas sold to power firms would increase from Rs.3,200 to Rs.6,818 per thousand cubic metres.
After adding royalty, the new price for user industries would be Rs.7,500 per thousand cubic metres
