New Delhi: The Oil Ministry is considering a proposal to hike the price of LPG by Rs 5 per cylinder. The price of kerosene is also likely to be increased by Rs 1.
The rise in prices comes amidst high level meetings being held over gas pricing. After Prime Minister Narendra Modi held a high level meeting on Sunday to take a decision on gas prices, his Principal Secretary Nripendra Misra chaired a second high level meeting over the issue on Tuesday.
The Oil ministry is working on new Cabinet note for gas prices. The Principal Secretary to the PM and the Finance Minister are reviewing the Rangarajan Gas Price Formula. A decision on gas pricing is expected soon.
Modi had met Finance Minister Arun Jaitley, Oil Minister Dharmendra Pradhan and Oil Secretary on Sunday to take a decision on gas prices where they reportedly discussed the Rangarajan Formula on gas prices. The new government may consider tweaking it. However, it is too early to say if the NDA government would constitute a new committee on gas prices.
The Oil Minister and Secretary briefed Modi and Jaitley on all possible legal options and are expecting to have a final say by the end of this week. The UPA government had accepted the Rangarajan Committee which proposed to price all domestically produced natural gas. In this regard, gas prices were slated to be increased to $ 8.4 per million British thermal unit from April 1, 2014.
The Rangarajan formula uses long-term and spot liquid gas (LNG) import contracts as well as international trading benchmarks to arrive at a competitive price for India.
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