De-regulation of natural gas prices likely in phases

Our Infrastructure Bureau

New Delhi, Dec 10: The Centre is unlikely to go in for complete de-regulation of natural gas prices, as part of the dismantling of APM from April 1. There seems to be rethinking on the issue of linking the natural gas prices to 100 per cent import parity with fuel oil from April, when the petroleum sector is proposed to be deregulated.

Official sources said the issue of de-regulation of gas prices was discussed at a meeting of finance minister Yashwant Sinha with petroleum minister Ram Naik on APM dismantling on Monday.

Although no formal decision has been taken in this regard, senior official sources said that following opposition from various quarters, the government is considering to de-regulate natural gas prices in phases.

“While the petroleum ministry had favoured that gas prices be linked to 100 per cent fuel oil parity, the finance ministry is of the opinion that prices should be increased at the rate of Rs 600 per annum for the next five years. Both the proposals were discussed and the two ministers have deferred any final decision on the issue. A midway solution is expected”, officials said. It may be mentioned here that even the ministries of power and fertilisers were opposed to the idea of linking natural gas prices with import parity from April 1.

Speaking to reporters after the meeting, Mr Naik said, “We have to decide whether we need to go for 100 per cent import parity in one step or in two steps. We will meet again to decided on the exact timing and how to go about it”.