‘Huge gas price hike will cripple economy and common man’

The CPI(M) and the CPI have opposed doubling of the price of natural gas to $8.4 per mmbtu, saying the Cabinet decision would only help corporates reap benefits, while the common man will be severely affected.

Demanding that the decision be kept in abeyance and be thoroughly discussed in Parliament, the CPI(M) said natural gas is a natural resource belonging to the country and it could not be arbitrarily given to corporates for supernormal profits.

The Cabinet decision will have a cascading impact increasing prices and burdening common people, while the benefit will mainly accrue to a single corporate house, the CPI(M) Polit Bureau said in a statement here on Friday. “Reliance, which is virtually blackmailing the country by keeping the 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.”

Describing the hike as “irrational’’ even in comparison to gas-exporting countries , the CPI(M) said that in Gulf countries, the price of domestic gas was only $1 per mmbtu. In Egypt, it was $ 2.57, in Nigeria $0.11, in Australia $5 and in Indonesia around $1.

The additional subsidy the government would have to bear at the present price of fertilizer- and gas-based power was estimated at to be Rs 71,250 crore for a five-year period. This government, which claimed it did not have funds for a universalised food security system, was prepared to subsidise the profits of a powerful corporate house, the CPI(M) said.

But the government would pass on much of this burden to the common people. Farmers would have to pay more for fertilizers, the price of CNG used by public transport in many cities would be hiked and so would be electricity tariffs, the Polit Bureau said.

The CPI said this magnitude of natural gas price hike, in the backdrop of the slowdown in the economy and persistent inflation, would deal a death blow to the Indian economy and cause untold hardship to farmers and other people.

  • Keep Cabinet decision in abeyance

  • Natural resources can’t be arbitrarily given to corporates