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CCEA to take call on gas price hike today

New Delhi, June 26
The Cabinet will tomorrow decide on raising natural gas prices for the first time in three years even as the move faces stiff resistance as it would result in rise in electricity tariff and fertiliser cost.

The Oil Ministry's proposal to price all domestically produced natural gas as per a complex international hub and imported LNG-based formula suggested by the Rangarajan panel is listed as item number 8 on the agenda of Cabinet Committee on Economic Affairs (CCEA) meeting scheduled for tomorrow.

It wants gas prices to be revised every quarter till 2017 when rates will be completely freed, sources said.

Sources said power and fertiliser ministries have strongly opposed the move as it would result in cost of electricity generation rising to unviable levels and steep jump in urea subsidy.

Also, Left parties have alleged that Oil Minister M Veerappa Moily is trying to help RIL by proposing a price hike. The CCEA, some government insiders say, may not accept the Oil Ministry's proposal of revising prices every three months based on quarterly average of international hub and imported gas (LNG) price. It may approve a 'moderate' revision. — PTI