CPI(M) said an additional burden of Rs8,000 crore will be passed on to the consumers of power and fertilisers by the decision to increase the price of gas produced by PSUs.
CPI(M) today alleged that the decision to hike natural gas prices was to ensure market for Mukesh Ambani's Reliance Industries Ltd (RIL) as the lower priced gas of PSUs would have been more attractive for power and fertiliser producers.
Opposing the decision to increase the price of gas produced by PSUs from $1.8 per unit to $4.2 per unit, it claimed that the doubling of the price in Administered Price Mechanism (APM) has been done to bring it in line with the price approved by the government for the gas produced by RIL.
"The government decision seems motivated to ensure the market for RIL's gas since the lower priced gas of the public sector enterprises would have been more attractive for the power and fertiliser producers," the party Politburo said in a statement.
CPI(M) said an additional burden of Rs8,000 crore will be passed on to the consumers of power and fertilisers by this decision. The transport industry using CNG will also be affected, it added.
"The doubling of the APM gas price comes at a time when the country is witnessing high inflation and price rise. The benefits accruing to one corporate group seems more important for the government than public interest," it claimed.
The government had on May 19 raised natural gas prices by more than double to $4.20 per mmBtu, a move that will result in a rise in power and fertiliser production cost and rise in CNG rates.
The Cabinet hiked price of gas sold to power, fertiliser and city gas projects from Rs3,200 per thousand cubic meters ($1.79 per million British thermal unit) to Rs6,818 per thousand cubic meters ($3.818 per mmBtu).
After adding royalty, the price for user industries would be Rs7,500 or $4.2 per mmBtu, at par with the rate at which Reliance sells its gas.
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