A day after the Election Commission asked the government to delay the doubling of natural gas prices until the completion of elections, Oil Minister M Veerappa Moily said top law officers will examine the order before the next course of action is decided.
"We are examining it. And because the matter is also in the Supreme Court of India, we would like our Solicitor General or Attorney General to examine it. I don't want to comment further on the issue," he told PTI in Bangalore today.
Deferring the new price regime by a few months will not have a material bearing on 85 per cent of the gas produced in the country. Firms such as ONGC will continue to sell gas at USD 4.2 per million British thermal units (mmBtu).
Also Read
However, the government will have to decide on the gas produced from Reliance Industries' eastern offshore KG-D6 fields. The firm's sales contracts expire at the end of the month and it was looking at renewing supplies to customers including fertiliser plants at the new rates.
Moily said delaying the rate hike will have implications on the investment climate and on subsidy as production will be hit in the absence of remunerative prices.
"Unless there is production, there is no gas. If there is no gas, (we will have to) import at more than USD 15 to 18 (per mmBtu). That means to say - we have to live with that kind of an import and there will be higher prices. That means the subsidy will go up," he said.
An Oil Ministry official in New Delhi said a directive could be issued to RIL to sell gas on existing terms to government-identified customers until further orders.
"The matter is sub judice and so we would like to see what the Supreme Court decides (on the issue)," he said.
The apex court today resumed hearing a petition by CPI leader Gurudas Dasgupta and an NGO challenging the proposed rate hike from April 1.
"Government lawyers have already mentioned about the EC directive in the court. We will now submit to the court on the terms (price) RIL can continue supplying gas beyond March 31. We will wait for what the court says," the official said.
