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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

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