India Defers Decision to Hike Gas Prices

The newly elected Indian government on Wednesday postponed the planned hike in natural gas prices by three months to September-end.

The move comes as the government said it wants a "comprehensive" review to make a controversial pricing formula more palatable, reports Press Trust of India, a news agency.

The postponement of the decision to hike prices comes as a setback to gas producers like Reliance Industries.

The previous government had approved pricing formula suggested by a panel headed by C Rangarajan. The new price regime was supposed to originally come into effect from April 1 but was deferred because of national elections in May.

The price of gas, according to this formula, comes to around $8.3 per million British thermal unit for April-June quarter, almost double the current price of $4.2.

"The Cabinet Committee on Economic Affairs (CCEA) today decided that comprehensive discussions were necessary on the issue. It was decided that consultations would be held with all stakeholders and it was important to keep public interest in mind," Oil Minister Dharmendra Pradhan told reporters on Wednesday after the CCEA meeting in Delhi, reports Press Trust.