People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 27

July 07, 2013



Gas Price Hike


The Polit Bureau of the Communist Party of India (Marxist) issued the following statement on June 28, 2013.


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 fertilisers  and power, from 4.2 dollars to 8 dollars per mmbtu (million metric British thermal units). This will have a cascading impact of increasing the prices and burdening the common people, while the main benefit will accrue to a single corporate house.


Reliance, which is virtually blackmailing the country by keeping the 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 the gas exporting countries where  the price of domestic gas is much lower. For example, in Gulf countries, the price is only one dollar per mmbtu, in Egypt 2.57 dollars, in Nigeria 0.11 dollars, in Australia five dollars and in Indonesia around one dollar.


The additional subsidy the government would have to bear at the present prices of fertilisers 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 that it does not have the funds to ensure a universalised 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.