No case for referring gas price hike to Election Commission: Finance Minister

Finance Minister P Chidambaram on Monday said there was no case for referring the Cabinet's decision to double gas price to the Election Commission (EC) and it was done out of "abundant caution".

 

"In my view there was no obligation on the part of Ministry of Petroleum and Natural Gas to refer this issue to the EC in the first place," he said when asked whether it was right to seek the commission's nod over the Cabinet's decision on gas price.

 

"This was a Cabinet decision taken several months ago. The cabinet too reviewed the decision about two and half three months long before EC notification came and reiterated its earlier decision. Therefore, there was no case to refer to the EC. I think they (Petroleum Ministry) did it out of abundant caution," he said.

 

Last week, the EC 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.

 

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 next month from current $4.2 per million British thermal units.

 

"Please remember, for every unit of gas that we don't produce out of our own fields, it does not mean that we can live without gas, we have to import an equivalent unit of gas. Today we are importing one unit of gas at a much higher price than approximately $8 that we had indicated with effect from April, 1 2014," he said.

 

On the issue of grant of new bank licences by the Reserve Bank of India (RBI), Mr Chidambaram said there was no need to refer it.

 

"Governor Raghuram Rajan made it clear even on that they referred to EC only out of abundant caution. This process had started almost two and half year ago. This is the process where the government has no role at all," he said. (Read more)