The gas price rise is without merits: Gurudas Dasgupta

Interview with CPI leader in Busines Standard :

Gurudas Dasgupta, a Communist Party of India senior, has been at the forefront in opposing a rise in the price of natural gas, on the ground that the real beneficiary is Reliance Industries Ltd (RIL). He explains his stand to Sanjay Jog. Edited excerpts:

What is your comment on the Centre's decision to increase the gas price from April 1, 2014?
Disastrous. Why was the pricing done in dollars when imported coal is not being so priced? Linking it with the dollar means the contractor will be the beneficiary. This was done during the BJP-led NDA government and the UPA government is continuing that line. In the wake of a declining exchange rate, the country will lose heavily and disproportionately.

Why are you opposing it?
The government has agreed to double the price without any scientific study of cost of production per unit, what has been the actual revenue and the profit. It is reported that the contractor has recovered much more that what was invested. Further, the government did not study the impact on the two main users, the fertiliser and power sectors.

The increase in the price of power per unit will involve more subsidy from the states. Stakeholders are not consulted and the government has taken the decision without due diligence. The government has responded to arm-twisting methods of corporate entities. Our battle will continue in and outside Parliament.

Do you stick to your earlier observation that the gas price rise is a scam?
Certainly. In view of the collusion between companies and the petroleum ministry, we have seen that a petroleum minister was removed in the past. Also, the timing: the deal has been struck on the eve of elections. It is a known fact that this corporate (read RIL) is generous in making political investments.

The finance minister said the rise was due to low domestic output.
A villain's argument. It will further accentuate price rise, will increase the electricity cost, spur the industrial cost of production and will ultimately be placed on the shoulders of consumers.

What were the options to avoid a gas price rise?
Why rely on a single contractor? As per the production sharing contract, the government should have taken control of the area in which the contractor had failed to produce. The government should have made the allocation of that area to other contractors, through international competitive bidding. That would have substantially reduced our dependence on a single contractor, as there would have been many more contractors. However, the government is deliberately allowing monopoly of a single contractor.

Do you want government to reconsider its decision?
The defaulting contractor (RIL) should have been put under pressure to produce the 80 million standard cubic metres a day of gas as promised in the contract. Instead, it has taken the statement of a single contractor as correct and decided to increase the gas price. It is the government's job to protect the interest of the country and also its natural resources.

The government has clearly defaulted in discharging its constitutional duty. It will have to review its decision and the rise in price must be done only after a proper technical evaluation.