The Polit Bureau of the CPI(M) strongly opposes the Cabinet decision to double the price of natural gas, a major input for the production of fertilizers and power, from 4.2 dollars to 8 dollars per mmbtu. This will have a cascading impact increasing prices and burdening common people, while the main benefit will accrue to a single corporate house.
Reliance, which is virtually blackmailing the country by keeping production of natural gas in the Kg-D6 gas basin below the stated target till the price is increased, will be the main beneficiary. It is estimated that every dollar increase in gas price will increase Reliance’s profits by at least 74 million dollars.
The hike is irrational even in comparison to gas exporting countries where the price of domestic gas is much lower. For example, in Gulf countries, the price is only $ 1 per mmbtu, in Egypt $ 2.57, in Nigeria $ 0.11, in Australia $ 5 and in Indonesia around $ 1.
The additional subsidy the Government would have to bear at present prices of fertilizer and gas based power is estimated to be to the extent of 71,250 crore rupees for a five year period. This Government which claims it does not have the funds to ensure a universalized food security system, is prepared to subsidise the profits of a powerful corporate house.
The Government will pass on much of this burden to the common people. Farmers will have to pay more for fertilizers, the price of CNG gas used by public transport in many cities will also be hiked as will electricity tariffs.
Natural gas is a natural resource which belongs to the country. It cannot be arbitrarily handed over for super profits to corporates. The CPI(M) demands that the decision for the price increase should be kept in abeyance and fully discussed in Parliament.