Skip to main content

'Unwise, undesirable': 40% hike in domestic gas price to result in cost push, inflation

By NS Venkataraman* 

Government of India has hiked the domestic natural gas price by 40 per cent to $8.57 per mBtu on gross calorific value for the second half of FY23, beginning October 1, compared to the April -September 2022 period.
The gas price ceiling for extracting the key commodity from challenging fields — deep water, ultra deep water and high pressure-high temperature fields — has also been revised upwards by around 25 per cent to $12.46 per million British thermal units (mBtu).
This is the highest price for procuring natural gas in the country, since the Government of India introduced the New Domestic Gas Pricing Guidelines in November 2014.
The previous high in gas price was recorded in the first half of the current fiscal year at $6.10 per mBtu. Before this, the highest price was reported for the November 2014-March 2015 period at $5.05 per mBTU.
Similarly, the highest ceiling price for gas from challenging fields was during H1 FY23 at $9.92 per mBtu. Prior to H1 and H2 FY23, the highest price reported was during the April 2019-September 2019 period at $9.32 per mBtu.
India meets half its natural gas requirement through domestic production, while the other half is imported as liquified natural gas (LNG).
Price of imported liquefied natural gas are always raised largely in tune with the increase in international price.
However, Government of India seems to be increasing the price of domestic natural gas also in tune with the international price trend. This certainly is not in order.
The government’s move to increase the price of domestic gas is unwise, as it will result in cost push inflation and consequently several undesirable developments with regard to the national economy.
Govt of India is upsetting the economics of hundreds of industrial, commercial and service oriented organizations
To protect the economics of a few oil exploration companies, the government is upsetting the economics of hundreds of industrial, commercial and service oriented organizations in the country by steeply hiking the domestic natural gas price.
Natural gas is an essential feedstock and fuel and around 50% of Indian requirement of natural gas is met by domestic production. With the increase in the price of natural gas, the cost of production of goods and services will increase proportionately, that will lead to increase in the market price of derivative products. In effect, this would amount to transferring the cost burden to the common man.
Consequently, the cost index in the country will go up that will lead to demand for higher salaries and wages both in the organised and unorganized sector. Inevitably, the expenses of the organisations and that of the government will go up significantly and this will be a vicious cycle.
While increasing the price of essential inputs like natural gas should be the last option, it appears to have become the first option for the government.
Obviously, the government has chosen the easy option of increasing the price of natural gas , without carefully examining the alternate options for holding the price of natural gas at the present level.
One is not sure whether the government has carefully carried out cost auditing with regard to the performance of the oil exploration companies in India. If it has done, it should have publicized the results of the auditing in a transparent manner, so that the people will be able to judge the price increase decision of the government.
The feasibility of subsidizing the domestic natural gas price to the extent necessary to ensure price stability in the domestic market , ought to have been carefully and judiciously examined.
In the last several months, it is known that many petrochemical companies in India, both in the public and private sector, have been turning out good performance and making good profit. The feasibility of raising the tax level on the profit made by petrochemical companies, to subsidise the natural gas price, should have been considered as one option.
In any case, price increase of natural gas at periodical intervals seems to have become a habit for the government. When the feasibility of reducing the price of natural gas due to any international development is there, the government just ignores it.
*Trustee, Nandini Voice For The Deprived, Chennai



'Draconian' Kerala health law follows WHO diktat: Govt readies to take harsh measures

By Dr Maya Valecha*  The Governor of Kerala has signed the Kerala Public Health Bill, which essentially reverses the people’s campaign in healthcare services in Kerala for decentralisation. The campaign had led to relinquishing of state powers in 1996, resulting in improvement of health parameters in Kerala. Instead, now, enforcement of law through the exercise of power, fines, etc., and the implementation of protocol during the pandemic, are considered of prime importance.

Reject WHO's 'draconian' amendments on pandemic: Citizens to Union Health Minister

By Our Representative  Several concerned Indian citizens have written to the Union Health Minister to reject amendments to the International Health Regulations (IHR) of the World Health Organization (WHO) adopted during the 75th World Health Assembly (WHA75) in May 2022, apprehending this will make the signatories surrender their autonomy to the “unelected, unaccountable and the whimsical WHO in case of any future ‘pandemics’.”

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Bihar rural women entrepreneurs witness 50% surge in awareness about renewal energy

By Mignonne Dsouza*  An endline survey conducted under the Bolega Bihar initiative revealed a significant increase in awareness of renewable energy among women, rising from 25% to 76% in Nalanda and Gaya. Renu Kumari, a 34-year-old entrepreneur from Nalanda, Bihar, operates a village eatery that serves as the primary source of income for her family, including her husband and five children. However, a significant portion of her profits was being directed toward covering monthly electricity expenses that usually reach Rs 2,000. 

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Work with Rajasthan's camel herders: German scientist wins World Cookbook Award 2023

By Rosamma Thomas*  Gourmand World Cookbook Awards are the only awards for international food culture. This year, German scientist  Ilse Kohler Rollefson , founder of Camel Charisma, the first of India’s camel dairies, in Pali district of Rajasthan, won the award for her work with camel herders in Rajasthan, and for preparing for the UN International Year of Camelids, 2024. 

Why is electricity tariff going up in India? Who is the beneficiary? A random reflection

By Thomas Franco*  Union Ministry of Power has used its power under Section 11 of the Electricity Act, 2003 to force States to import coal which has led to an increase in the cost of electricity production and every consumer is paying a higher tariff. In India, almost everybody from farmers to MSMEs are consumers of electricity.

Golwalkar's views on tricolour, martyrs, minorities, caste as per RSS archives

By Shamsul Islam*  First time in the history of independent India, the in-charge minister of the Cultural Ministry in the current Modi government, Prahlad Singh Patel, has glorified MS Golwalkar, second supremo of the RSS and the most prominent ideologue of the RSS till date, on his birth anniversary, February 19. In a tweet he wrote : “Remembering a great thinker, scholar, and remarkable leader #MSGolwalkar on his birth anniversary. His thoughts will remain a source of inspiration & continue to guide generations.”

'Pro-corporate agenda': Odisha crackdown on tribal slum dwellers fighting for land rights

By Our Representative  The civil rights network Campaign Against State Repression (CASR), even as condemning what it calls “brutal repression” on the Adivasi slum dwellers of Salia Sahi in Bhubaneshwar by the Odisha police, has said that the crackdown was against the tribals struggling for land rights in order to “stop the attempts at land-grab by the government.”

Deplorable, influential sections 'still believe' burning coal is essential indefinitely

By Shankar Sharma*  Some of the recent developments in the power sector, as some  recent news items show, should be of massive relevance/ interest to our policy makers in India. Assuming that our authorities are officially mandated/ committed to maintain a holistic approach to the overall welfare of all sections of our society, including the flora, fauna and general environment, these developments/ experiences from different parts of the globe should be clear pointers to the sustainable energy pathways for our people.