KG gas price to burden Andhra Pradesh

Hyderabad: An extra burden of 4,000 crore rupees has to be borne by the state government (APTransco) because, starting April 1, 2014, the price of gas from the Krishna Godavari basin to be paid to Reliance for extracting the gas will be doubled and electricity charges will also increase by 2 rupees per unit.

Members of the Aam Aadmi Party in Hyderabad have demanded that the Government of India reverse its decision to increase the price to be paid to Reliance from $4.2 per MBTU to $8.4 per MBTU. They have asked for a CAG audit and also said that the state government should take the company to court. AAP members claim that their study shows that just about 600 MW of the 2,770 MW is being produced today because Reliance is hoarding the gas and not generating the quantity agreed to in its agreement.

"The increase in gas prices will increase the price of fertilisers, hitting the farmers and forcing the government to buy power at high cost from the open market. If only 18 per cent of the gas is being supplied, why is the government not cancelling the contract with Reliance?" asked Kirankumar Vissa, secretary of the AAP state campaign committee.

AAP state campaign committee convener B. Ramakrishna Raju said, "When Murli Deora was petroleum minister, under pressure from Reliance, the price was raised to $4.2 per MBTU. When Jaipal Reddy refused to raise the price further, he was transferred. Now, the price is being raised to $8.4 per MBTU. As per the information submitted to Parliament, the cost of production is only $2.75 per MBTU."