Modi uses gas weapon in state election build-up

Vol 16, PW 2 (09 Aug 12) People & Policy

He will stop at nothing to become the next prime minister of India.

Seven gas retail players in Gujarat can testify to that after a stern warning from chief minister Narendra Modi not to raise piped gas or CNG prices until after state elections in December. “Modi is using gas as a political weapon,” we hear.

Officials from the chief minister’s office headed by senior civil servant K. Kailashnathan conveyed Modi’s diktat by phone in July to GSPC Gas, Sabarmati Gas, Charotar Gas, HPCL, Gujarat Gas, Vadodara Municipal Corporation (VMC) and Adani Energy.

“I expected this,” says one company. “Gas pricing is sensitive in Gujarat; it can make or break a government.

” Any increase in gas prices, he says, will impact the ruling BJP's popularity and with it Modi. “Any losses can be adjusted as ‘election donations’,” jokes a source.

Most affected will be Modi’s own pet company, GSPC Gas, which sells 4.3m cm/d to 356,220 homes, 1650 factories and 1292 businesses across 280 villages, towns and cities. GSPC Gas charges Rs18.18/cm for piped gas to homes, while businesses pay Rs37/cm and factories pay Rs30.70/cm.

GSPC also charges Rs50.20/kg for CNG. BG subsidiary Gujarat Gas will likewise freeze the price it charges for supplying 3.2m cm/d to 360,000 homes, factories and businesses in Surat, Ankleshwar and Bharuch.

Gujarat Gas charges Rs25.89/cm to factories, while businesses pay Rs39/cm and homes pay Rs17.50/cm. CNG is sold at Rs51.95/kg.

Adani sells 855,104 cm/d as piped gas to 161,668 customers in Ahmedabad and Vadodara, charging Rs24.50/cm to households, while factories pay Rs37.25/cm, businesses pay Rs45.50/cm, and CNG buyers pay Rs53/kg. Sabarmati, Charotar, HPCL and VMC all have similar rates.