India defers gas price hike decision by three months

NEW DELHI Wed Jun 25, 2014 11:58pm IST

An employee of a cooking gas agency transports gas cylinders on a cart in Mumbai June 7, 2010. REUTERS/Danish Siddiqui/Files

An employee of a cooking gas agency transports gas cylinders on a cart in Mumbai June 7, 2010.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - India deferred a decision on Wednesday to raise prices of locally produced gas for next three months, saying the matter requires more discussion.

Gas prices were due to rise from April 1, but were delayed in the build up to a general election that ended in May.

"The whole issue as well as the guidelines (for the price hike) require a comprehensive discussion," Oil Minister Dharmendra Pradhan told reporters after a meeting of the federal cabinet.

"We will have a dialogue with all the stakeholders. There is a need to take care of public interest."

Currently the bulk of domestic gas is sold at $4.2/mBtu.

Demand for gas in India far outstrips production, but prices have been kept low for important industries such as fertiliser production and power generation, deterring investment in the sector.

Producers such as Reliance Industries (RELI.NS) and state-run ONGC (ONGC.NS) want a price hike because the cost of exploring new reserves - many of which are in deep water - is more than the current price, leaving them reluctant to take the risk.

But any increase in prices would be unpopular with consumers as it would drive up inflation.

India is a large importer of energy. Its net energy imports last fiscal year amounted to 6.3 percent of gross domestic product.

Reliance, ONGC and Essar Oil (ESRO.NS) could not immediately respond to requests for comment outside regular business hours.

(Additional reporting by Aman Shah in Mumbai; Editing by Louise Heavens)

FILED UNDER:

Reuters Showcase

Land Ordinance

Land Ordinance

Modi says willing to make changes in land decree  Full Article 

Sahara Woes

Sahara Woes

SEBI cancels Sahara's mutual fund license  Full Article 

Gold Demand

Gold Demand

India gold demand muted, eyes cut in import duty  Full Article 

Coffee's Hot

Coffee's Hot

IPO could value Cafe Coffee Day at $1 billion  Full Article 

Sahara Salaries

Sahara Salaries

Some staff say Sahara has not paid salaries for months   Full Article 

DLF Fined

DLF Fined

DLF says reviewing $8.4 million SEBI penalty  Full Article 

Rail Budget

Rail Budget

Breakingviews - India goes back to future with $137 bln rail push  Full Article | Full Coverage 

Clean Energy

Clean Energy

India says clean energy a $160 billion opportunity over five years  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage