M'rashtra to challenge HC order on gas prices

Maharashtra government will be challenging the Gujarat high court's decision to stay Union Cabinet's decision on averaging out prices of the gas supplied by the Petronet LNG.

Maharashtra was the biggest beneficiary of the Union cabinet's decision with Dabhol power plant getting the gas at much cheaper rates compared to present world prices.

A senior official from the state government's energy ministry told Business Standard, "On March 6 empowered group of minister's led by foreign minister Pranab Mukherjee decided to pool or average out prices of gas supplied by Petronet LNG to help industries, who had to take brunt due to hike of almost 30 per cent in the prices of gas in the world market. However, some industries who had a previous contractual agreements with the Petronet had to pay more, under the new regime of gas prices.

This irked the industries in Gujarat. Various industries led by the Gujarat government-owned Gujarat State Petrochemical Corporation (GSPC) challenged this decision in the Gujarat high court and got an ex-parte stay on central government's decision, earlier this week.

With Gujarat government getting the stay to union Cabinet's decision, Ratnagiri Gas and Power (RGPPL) will get gas at the price of Rs 390 Million Metric British Thermal Unit (MMBTU) instead of Rs 240 MMBTU.

This would have increased our price of power from around Rs 3 per unit to well over Rs 4 per unit that is why state government decided to join petition as intervener which will be filed by union government, Petronet and GAIL, said the official.

When contacted state energy minister Dilip Walse-Patil confirmed the state government's decision to join petition.