Guj HC stays proposal to hike gas prices

Ahmedabad, July 31 (UNI) The Central government's efforts to supply cheaper gas to fuel-based Dhabol Power project in Maharashtra received a major setback today with the Gujarat High Court staying the operation of Petroleum Ministry's order on gas prices of Petronet LNG Limited's (PLL) Gas under which PLL proposed to increase gas prices from 2.9 dollars per BThU to nearly five dollars.

Granting stay on the petition of Gujarat State Petroleum Coporation, the High court also issued notices to the Union government and GAIL returnable on August 9 while it deleted IOC, BPCL and PLL as respondents.

The Petroleum Ministry's order dated March 6 states that the prices of LNG will be fixed on the pool pricing arrangements. As a result, existing LNG buyers have to pay higher prices, causing more than Rs 1,000 crore loss to all those in the industry, who are now buying LNG at less than three dollars per BThU.

The revised prices were to be effective from August one.

The need to shift to new pricing arrangement was followed to subsidise gas prices for Dhabol power projects as the imported gas was costing more than eight dollars, which was not economical to run the project and cost of generating electricity was much higher.

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