By Saurabh Chaturvedi
NEW DELHI--India may raise the government-controlled price of
natural gas starting July 1, a senior oil ministry official said
Thursday.
While India had originally planned to start increasing the
state-controlled price of natural gas toward $8 per million metric
British Thermal units from $4.20 starting in April, it put off the
price increase as India was in the middle of elections that
month.
The country's election watchdog deferred the decision, saying it
could affect the outcome of the polls. Now that a new government is
in power, India is ready to get back on track with the rate
rise.
"It is an issue which needs attention. (A) decision needs to be
taken before July 1," said the official, who didn't want to be
named.
On May 10, Reliance Industries Ltd., the operator of India's
biggest natural-gas find, and its partners BP PLC and Niko
Resources Ltd. said that they have sought arbitration with the
Indian government in an effort to force implementation of a planned
price increase for natural gas.
A decision to raise prices may well be one of the first key
policy decisions by the newly formed Bharatiya Janata Party
government. It would help revive optimism about the ailing oil and
gas sector.
The oil ministry hopes that higher prices would push exploration
companies to dig and produce more and help the country reduce its
dependence on imports. India meets three-fourths of its energy
needs through imports.
Write to Saurabh Chaturvedi at Saurabh.Chaturvedi@wsj.com
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