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Electricity, piped gas, cab/auto fares set to soar
You will now have to pay more for electricity, piped cooking gas, and taxi, autorickshaw and bus fares.
With the government more than doubling the price of natural gas, Power Minister Sushil Kumar Shinde on Thursday said that power tariff across the country will go up by about Re 1 per unit (kwh).
"Power tariff would go up. We have not worked out the details, but it is likely to be about Re 1 per unit," Shinde told reporters on the sidelines of a Ficci event in New Delhi on Thursday.
On Wednesday, the government raised natural gas prices by more than double -- to $4.20 per mmBtu. The Cabinet also hiked the price of gas sold to power, fertiliser and city gas projects from Rs 3,200 per thousand cubic metres ($1.79 per million British thermal unit) to Rs 6,818 per thousand cubic metres ($3.818 per mmBtu). The revised price is the same that the government had set for gas from Reliance Industries Ltd's Andhra offshore field.
Power tariff is regulated by the Central Electricity Regulatory Commission.
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Additonal inputs: PTI
Electricity, piped gas, cab/auto fares set to soar
The new gas rate would result in 2.75 per cent increase in power tariff on an overall basis, and up to 20 per cent hike in the price of compressed natural gas (CNG) for automobiles.
CNG currently costs Rs 21.90 per kg in Delhi.
The price of CNG is likely to increase by about Rs 6 per kg, including increase in taxes and other charges, according to media reports.
Piped kitchen gas is also likely to cost about Rs 3.50 more per unit.
The decision to raise the gas price is perhaps the first step the government has taken to free up petroleum prices. The proposal for such a move had been hanging fire for more than a year.
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Electricity, piped gas, cab/auto fares set to soar
The oil ministry had previously wanted to raise the gas price in stages to $4.20 per mmBtu. It wanted rates paid to ONGC and OIL to be immediately hiked Rs 4,142 per thousand cubic meters ($2.32 per mmBtu).
The consumer price at this would have been 10 per cent higher at $2.55 per mmBtu. Thereafter, in three more installments, the rates were to be hiked to $4.20 per mmBtu.
However, on the insistence of the Union finance ministry, the oil ministry withdrew the proposal and moved a fresh one seeking to raise the price of the gas under APM to Rs 6,818 per thousand cubic meters or $4.20 per mmBtu, sources said.
Now analysts believe that prices of petrol and diesel too could be increased by up to Rs 2-3 per litre to offet the losses suffered by public sector oil companies.
Apart from the hike in natural gas prices, the government will also impose taxes and other levies and pipeline transportation charges. While the move will help the state-run firms breakeven in gas business, it would result in hike in electricity generation tariff and fertilizer production cost.
The finance ministry wanted the hike to happen in one go and not in stages, they said. Because of Wednesday's decision, ONGC would gain Rs 5833.78 crore (Rs 58.33 billion) more revenue a year.