In an apparent bid to benefit energy giants including Reliance Industries that was locked in a fierce battle with previous UPA government over gas pricing, the NDA government on Monday fixed the price of the domestic natural gas at USD 5.05 per MMBTU.
"On the basis of new domestic gas pricing guidelines 2014, the petroleum planning and analysis cell has notified the price applicable for the period between November 1, 2014 to March 31, 2015 as USD 5.05 per MMBTU on gross calorific value basis," the Petroleum and Natural Gas Minister Dharmendra Pradhan told Lok Sabha in a written reply.
The increase in the price of dollar will have impact on various sectors resulting in increase in the cost production of urea by Rs. 1370 MT, increase in cost of power generation from gas-based power plants by Rs. 0.45 per unit at 70 per cent plant load factor.
The minister said this will also increase cost of non-subsidized cooking gas, CNG and PNG.
All the domestic energy players led by Reliance Industries of Mukesh Ambani were engaged in dispute with the previous Congress-led UPA government as the latter didn't agree to fix the gas prices as demanded by Reliance and other energy majors who were demanding fixing of the gas price at USD 6.00 per MMBTU.
The then UPA government was not in favour of fixing the price at more than USD 2-3 per MMBTU.
The battle between Ambani and the then Petroleum Minister Jaipal Reddy had climaxed when the Minister ordered Reliance to hold its general body meeting in the Ministry, which ultimately led change of his portfolio.
The BJP and its other allies had created ruckus in the Parliament accusing the then government of trying to succumb to the pressure of oil and gas giants and selling national assets at a throwaway prices.