Left forces govt U-turn on LPG

Monthly hike of Rs 5 a cylinder rolled back.

The government today decided to go back on its November 4 decision to increase the price of cooking gas by Rs 5 a cylinder every month. It also put on hold an increase in natural gas prices for power and fertiliser units.

The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) after a United Progressive Alliance coordination committee meeting in the morning, where the Left parties pressed for a rollback in cooking gas price.

Oil marketing companies claimed they were losing Rs 190 on every cooking gas cylinder sold by them even after the government allowed them to raise prices by Rs 20 per cylinder on November 4.

"We would have recouped Rs 5 per cylinder every month if the government had allowed us to raise prices on a monthly basis, but now we will bleed more," said an executive with a state-owned company.

The monthly increase would have helped oil companies reduce their under-recovery to a negligible level by the time the oil subsidy was dismantled in April 2007.

"It has been decided by the CCEA that the previous decision to raise LPG price by Rs 5 every month stands rescinded," Petroleum Minister Mani Shankar Aiyar told reporters, adding that prices of other petroleum products were not being changed.

The issue of natural gas pricing and the petroleum and gas regulatory board Bill have been referred to a group of ministers, following objections raised by various ministries.

Finance Minister P Chidambaram said the CCEA had approved an additional investment of $1.07 billion for the first phase development of Sakhalin offshore fields in Russia.

ONGC Videsh will raise the amount from its own resources. The additional amount will include about $503 million towards carry loans to Russian parties in the production sharing agreement.

The CCEA has also decided that ONGC Videsh will take necessary steps to ensure that all costs are recoverable under the production sharing agreement.

Officials said the petroleum ministry had proposed a 12 per cent increase in natural gas price for fertiliser units and 26 per cent for power units. On a provisional basis, the price of natural gas was to be increased from Rs 2,850 per thousand cubic metres (tcm) to a fixed price of Rs 3,200 per tcm and Rs 3,600 per tcm to the fertiliser and power sectors, respectively.

On low flame

COOKING GAS
Monthly hike of Rs 5 a cylinder done away with

NATURAL GAS PRICES
kept on hold. Power and fertiliser units get relief

OIL REGULATORY BOARD
Referred to a group of ministers

SAKHALIN OIL FIELD
Additional investment of $1.07 billion by ONGC Videsh cleared