Deferring gas price hike will hit investments: CII

Expressing concern over the Election Commission's decision to defer the proposed hike in gas prices, trade body CII today said the move is against the stated government policy and will hit investment decisions of the oil and gas industry.

"We would like to reiterate that it is only a computation decision where the formula is pre-fixed on the basis of a Cabinet decision. The decision to hold back price revisions could have a long-term impact on the investment climate in this crucial sector," CII President Kris Gopalakrishnan said.

The Election Commission yesterday asked the UPA government to defer notifying doubling of price of the fuel produced by companies such as Reliance Industries till general elections are completed.

The poll panel decision to defer the government's proposal on gas prices would go against the stated government policy and adversely impact investment decisions of the oil and gas industry," the CII statement said.

"To keep gas prices suppressed at the existing level, which is almost at half of the estimated revised prices, would come as a bonanza for poll-bound consumers, which by itself may be treading on the model code of conduct," CII said.

A new pricing regime was to be implemented from next month for all private and public sector natural gas producers under which rates were to rise to $8.3 from the current $4.2 per million British thermal units.

Though the decision to revise gas prices from April 1, 2014 was first taken in June 2013 and notified on January 10 this year, the Oil Ministry had approached Election Commission for permission to announce the new price.