Reacting to news reports on the proposed hike in gas prices, CPI(M) Rajya Sabha MP, Tapan Sen, has written a letter to Prime Minister Narendra Modi seeking a fair and balanced view and ordering a thorough review of the proposed increase.

He drew the PM’s attention to the unanimous recommendation of the Standing Committee on Petroleum and Natural Gas, headed by senior BJP leader Yashwant Sinha, which had said it "believes that natural gas is a national resource and a public asset and therefore any discourse on its pricing policy should reflect this principle so that it is used for the larger national good and not for profiteering."

Sen said natural gas was being produced domestically and must be priced based on cost plus reasonable returns on investment.

“Any other methodology of pricing having no relevance with the cost of production in the name of "market-determined" or "arm's length basis", tailor-made to benefit the contractor is bound to have perverse impact on the economy as well as people at large,” he added.

He reminded the Prime Minister that during the UPA-II regime, the Power and Fertiliser Ministries had ‘vehemently’ opposed the price increase based on the Rangarajan Committee recommendation on valid grounds.

Sen said after doubling of gas prices, the Fertiliser Ministry had estimated that the additional subsidy requirement would be Rs 14,500 crore a year from 2013-14 to 2016-17 and Rs 19,000 crore from 2017-18 onward (assuming Rs 60=1$ and increase from $4.2 to $8.4 per mmbtu).

“Similarly, the Power Ministry estimated that the impact would be Rs 29,800 crore per annum, based on the requirement of existing plants and Rs 46,360 crore, if one considered the capacity under construction as well. Thus the increased requirement of subsidy annually would be Rs. 44,860 crores on a conservative basis and Rs. 66,360 crores if all the new plants were commissioned,” he added.

Sen flayed the move to “obfuscate" the issue by projecting that the price increase would benefit the PSUs more than private oil major Reliance. There is no justification of benefiting even PSUs out of the way simultaneously imposing huge additional avoidable burden on the public exchequer and the common people, he added.

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