Mr. Modi recently went around urging people to give up gas subsidy for the benefit of nation. It all sounds good till you realize his government is the one raising gas production prices without providing any reason for it.
Gas Prices are the monopoly of the government and this allows a lot of room for favours.
In May Mr. Modi was sworn as Prime Minister. In October, just after assembly elections, he raised gas production prices paid by government to ONGC, Reliance by 33% from 4.2$ per million BTu to 5.61$ per million BTu.
Mind you this increase in gas prices was ad hoc and no reason was given for it.
Every dollar increase in gas price will lead to a Rs 1,370 per tonne rise in urea production cost and a 45 paise per unit increase in electricity tariff (for just the 7 per cent of the nation's power generation capacity based on gas).
Also, there would be a minimum Rs 2.81 per kg increase in CNG price and a Rs 1.89 per standard cubic metre hike in piped cooking gas.
In a way he made good on his promise to his financiers (after all somebody has to pay for those planes) by screwing the exchequer. Now that's a man, I like - a man of his word - to the party and his financiers. Nation be damned!
Sorry! I sound very anti-national. But with folded hands, I urge those who believe in him to ignore the above facts - Please do give up your subsidies. Some companies need it more than you do. :)
Source:
http://articles.economictimes.indiatimes.com/2014-10-18/news/55172970_1_largest-gas-producer-kg-d6-price-formula
