The Polit Bureau of the CPI (M) has opposed the Cabinet decision to double the price of natural gas, a major input for the production of fertilizers and power, from 4.2 dollars to 8 dollars per mmbtu.

Demanding that the decision for the price increase should be kept in abeyance and fully discussed in Parliament, the CPI (M) said that natural gas is a natural resource which belongs to the country and it could not be arbitrarily handed over for super profits to corporates.

This will have a cascading impact increasing prices and burdening common people, while the main benefit will accrue to a single corporate house, a statement issued by the party said in New Delhi on Friday.

“Reliance, which is virtually blackmailing the country by keeping production of natural gas in the Kg-D6 gas basin below the stated target till the price is increased, will be the main beneficiary. It is estimated that every dollar increase in gas price will increase Reliance's profits by at least 74 million dollars,’’ the Polit Bureau statement said.

Describing the hike “irrational’’ even in comparison to gas exporting countries where the price of domestic gas is much lower, the statement said in the Gulf countries, the price is only $ 1 per mmbtu, in Egypt $ 2.57, in Nigeria $ 0.11, in Australia $ 5 and in Indonesia around $ 1.

The additional subsidy the government would have to bear at present prices of fertilizer and gas based power is estimated to be to the extent of Rs 71,250 crore for a five year period. This government which claims it does not have the funds to ensure a universalized food security system, is prepared to subsidise the profits of a powerful corporate house, the CPI (M) said.

The government will pass on much of this burden to the common people. Farmers will have to pay more for fertilisers, the price of CNG gas used by public transport in many cities will also be hiked as will electricity tariffs, the Polit Bureau said.

The Communist Party of India (CPI), too, has opposed the hike saying in the backdrop of the slowdown in the economy and persistent inflation this magnitude of price increase would deal a death blow to the Indian economy and cause untold hardship to the people of the country and its farmers.

“We demand that any price increase should be kept in abeyance and the government should come out with full facts and figures and have a debate with all stakeholders before it pushes ahead with this move,’’ a statement issued by the CPI said.

Natural gas belongs to the people of the country and the government is holding it in trust for the people. They cannot be plundered by the corporates and actively be supported by the very arms of the government that are supposed to regulate them, the statement added.

Though the increase in prices would be applicable to all producers, both PSUs and private companies, the super high profits of private companies will be retained by them, whereas, government can mop up the increased revenues of PSUs. It should also be noted that the entire price increase/enhanced subsidy will be passed on to RIL as super normal profits, since the profit share of the private operator is 90 per cent. This would imply that RIL would have enhanced profits of the order of Rs. 81,000 crore a five year period, the statement added.