Expect natural gas prices to rise after Gujarat election

Vol 6, PW 20 (04 Dec 02) News in Brief

Gas companies are expecting the oil ministry to announce its long-awaited pricing policy in January 2003, after next month's state election in Gujarat.

Most believe the Hindu nationalist BJP government in Delhi doesn't want to raise gas prices in the middle of an election campaign for fear of antagonising Gujarat's industrial lobbies. Even after elections, no one expects prices to be fully decontrolled in line with plans to revise the price in two stages ahead of full decontrol on 1st October 2003.

"There is a lot of resistance from fertiliser and power companies," reveals a source. "At the most, prices will be raised from the present Rs2, 850 per million cubic metre to Rs4, 300.

Raising the price to Rs5, 800 looks very difficult as of now." Gujarat's BJP government is seeking re-election in a tough battle with the opposition Congress party. Polling is scheduled for 12th December.