ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Subsidising Producers’ Profits?

Natural Gas Price Hike

The government, on the basis of a very questionable methodology, has doubled the price payable to natural gas producers. Through this decision as with a similar one in 2009, the government has compromised economic reasoning at the altar of crony capitalism and political expediency. In the absence of a homogeneous gas market which throws up a market price, the only option should have been for an independent, professional and quasi-judicial regulator to compute effi ciency-based costs and determine the price on the basis of a reasonable return. Instead, a Group of Ministers has taken a decision which could transfer up to Rs 26,000 crore a year to producers, especially one private company.



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