Prime Minister Narendra Modi, oil minister meet for gas price

New Delhi: Prime Minister Narendra Modi on Sunday met oil minister Dharmendra Pradhan and  finance minister Arun Jaitley to reportedly thrash out the issue of increase in domestic natural gas price.

The UPA government had accepted the C. Rangarajan Committee formula, which had sought to double the price of natural gas prices from domestic oil fields from April 1, 2014. Under this formula, gas prices were to increase from the current $4.2 per million British thermal unit (MMBTU) to $8.4.

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However, the price increase could not be implemented as the model code of conduct set in due to the general elections. Now, the ball is in the court of the new government on how to increase natural gas prices.

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This is the second time in three days that Mr Modi has met the oil minister. There is speculation that while the new government is keen to take an early decision on the issue, it may be looking at moderating the proposed increase. The new rate could be announced as early as this week. Any increase in domestic gas prices will push up the cost of electricity, urea, CNG and piped cooking gas.

However, oil companies are claiming that the current $4.2 per MMBTU rate is not enough to help produce from new finds in deep sea.