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State-run gas company GAIL expects a hit of Rs 1300 crore annually on pre-tax profits on account of higher costs in its liquefied petroleum gas (LPG) and petrochemicals businesses, its finance head said.
On Thursday, the Indian government approved a gas price hike for the first time in three years. Indicative pricing suggests domestic gas could rise to around $8.4 per mmBtu from April 1, 2014, compared $4.2 per mmBtu currently.
"We have a solid case for withdrawal of subsidy burden now. We are already taking up the case with the ministry," GAIL's Finance Director P.K. Jain told Reuters.
GAIL bore subsidy costs of about Rs 2700 crore in 2012/13 as part of the government's scheme to compensate state oil retailers for selling petroleum products below costs.
