Friday, May 27 2005 13:57 Hrs (IST) - World Time -

New Delhi: Government has approved a 12 per cent hike in subsidised natural gas prices for power and fertiliser units, a move that would boost revenues of Oil and Natural Gas Corp (ONGC) by over Rs 1000 crore annually.

"The Cabinet Committee on Economic Affairs (CCEA) in its meeting on May 19 approved an ad-hoc increase in natural gas prices to Rs 3200 per thousand standard cubic meters per day from the present Rs 2850 per thousand standard cubic meters per day," a Government official said.

The CCEA also approved linking natural gas prices for consumers in all other sectors to market prices, which is around $ 3.86 per million British thermal unit (mBtu).

Transport sector, industries in Agra/Ferozabad and small consumers (consuming less than 0.05 million standard cubic meters per day) have been spared from any hike for 3-5 years.

Finance Minister P Chidambaram, briefing reporters after the CCEA meeting on May 19, had stated that a decision on Petroleum Ministry's proposal to raise natural gas prices was deferred.

But, the minutes of the CCEA meeting circulated this week, clearly state that the CCEA chaired by Prime Minister Manmohan Singh had cleared the ad-hoc raise and referred the matter of fixing the producer price of natural gas to the Traffic Commission, the official said.

The CCEA did not clear an increase in gas transport tariff. Natural gas price for the North-east sector would be 60 per cent of the new price.

The biggest beneficiary of the Cabinet decision would be ONGC, the country's largest gas producer, while input cost for power and fertilizer units is set to rise.