Natural gas to power and fertiliser units is being sold at revised rates from today, but the same for city gas projects will come into effect from 8th June
The government has, from today, raised the prices of natural gas by more than double to $4.20 per million metric British thermal unit (mmBtu), leading to a hike in power and fertiliser production costs, reports PTI.
However, a hike in compressed natural gas (CNG) rates will come into effect only from next week.
The cabinet had-last month-approved the raising of gas price from Rs3,200 per thousand cubic metres ($1.79 per mmBtu) to Rs6,818 per thousand cubic metres ($3.818 per mmBtu). After adding royalty, the price for user industries would be Rs7,500 per thousand cubic metres (Rs7.5 per cubic metre) or $4.2 per mmBtu.
"The decision has been notified with effect from 1st June," an official said, adding, "Natural gas to power and fertiliser units is being sold at revised rates from today, but the same for city gas projects will come into effect from 8th June."
The increase in input cost would result in the price of compressed natural gas (CNG) going up by Rs5.60 to Rs27.50 per kg in the national capital. But this would come into effect only from 8th June.
The price of piped natural gas (PNG) would be raised from Rs15.92 per cubic metre to Rs16.85 per cubic metre.
"Gas producers Oil and Natural Gas Corporation (ONGC), Oil India (OIL) and gas marketer GAIL India have been informed of the decision. They have started billing customers according to the new rates," he said.
The hike in gas price would also lead to a rise in the cost of fertiliser production and power generation. However, fertiliser prices will not increase as the government subsidises the sector.
The increase in power tariff would be marginal as only 11% of the total electricity generated in the country comes from gas-based power projects. And, of these, only one-third use the gas with the increased price tag.
ONGC and OIL would gain about Rs5,000 crore and Rs700 crore in revenue respectively due to the gas price increase.
GAIL India, which has been allowed to charge Rs200 per thousand cubic metres or 11.2 cents per mmBtu as marketing margin, would gain Rs150-Rs200 crore in revenue annually.
State-run ONGC and OIL produce 54.32 million cubic metres of gas per day-about 40% of the total amount originating from the country-through fields given to them on a nomination basis. The gas, APM, is sold at government-controlled rates of $1.79 per mmBtu.
"ONGC and OIL have been making substantial losses in their gas business. The (current) low prices of gas have discouraged national oil companies from making investments (in raising dwindling output). Therefore, it became essential to increase the price of gas," the official said.
The government withdrew the stimulus partially in this fiscal's Budget by raising excise duty by 2%. The impact of this measure could be there for just the last month of 2009-10, that is March
With the Indian economy growing at better than the estimated rate of 7.4% in the last fiscal, chief statistician Pronab Sen on Monday said partial withdrawal of the stimulus is going to work well for the economy.
"Private consumption would increase and government consumption would come down in the first quarter of this fiscal. Stimulus withdrawal is going to work well," Mr Sen told reporters after the release of GDP data.
In the last fiscal, private final consumption expenditure declined by 57.3% from 57.7% a year ago, while expenses by the government rose by 12.3% from 11.7%, indicating that the stimulus was still needed in the economy.
The government withdrew the stimulus partially in this fiscal's budget by raising excise duty by 2%. The impact of this measure could be there for just the last month of 2009-10, that is March.
In the 2009-10 fiscal, mining and quarrying grew by 10.6% compared to just 1.6% a year ago.
The sector saw a robust jump of 14% in the fourth quarter.
Mr Sen attributed this to gas and oil output from Reliance Industries' (RIL) D6 block in the Krishna Godavari (KG) basin and Cairn Energy's Barmer fields in Rajasthan.
He said in the first and second quarters of this fiscal, output from these fields would result in a 40 basis points rise in mining and quarrying.
To a query on reduction of fiscal deficit because of spectrum money, he said a policy decision has not been made so far as to whether money generated through the auction of third generation (3G) spectrum would be used for reducing fiscal deficit or not.
Mr Sen said both growth and inflation should be watched for any policy action.
He said the global situation is much more uncertain now than a couple of months back.
As such, the chief statistician said the growth figure of 7.4% during 2009-10 would not be a deciding factor for economic expansion this fiscal.
"Global situation is such that I think that much greater sense of uncertainty in the global economy is there than we had in couple of months back. So far as the gross domestic product (GDP) in 2010-11 is concerned, I don't think these figures would make any material difference. European situation is a new phenomena, how it is going to impact on macro-basis on our economy, that we don't know," he said.
The Indian economy grew by better than 7.2%, as calculated by Central Statistical Organisation in its advance estimates.
Computerisation of the Financial Intelligence Unit has been launched because of the changing dynamics of financial crimes and the need for a faster scrutiny of all available inputs
The country's financial intelligence will now be on a comprehensive digital platform to help enforcement agencies gain real time access to critical information and faster analysis of suspicious transactions, reports PTI.
Finance ministry sources said the computerisation of the Financial Intelligence Unit (FIU-IND), which investigates and disseminates sensitive information between financial and law enforcement agencies for identification of suspicious money laundering, is already on.
"Financial Intelligence Network will be a major reform initiated by the ministry. All the banks are already connected to us but the new network will enable electronic data entry and analysis on a real time basis of suspicious transactions," the sources said.
They said the new technology has been introduced because of the changing dynamics of financial crimes and the need for a faster scrutiny of all available inputs. The platform is being prepared by software giant Wipro and will be called FINnet.
"Most of the bigger crimes have a financial aspect to it. The FIU-IND therefore acts like the key player to unravel many of the financial trails of various individuals," the sources said.
Last year over 4,000 suspicious financial transactions relating to crime, terror and others were analysed by the FIU-IND.
In an effort to identify patterns of money laundering, terrorist financing and other economic crimes, the government also scanned about 55,11,150 cash transactions of at least Rs55,111.5 crore.
Each cash transaction that was monitored and reported to the FIU-IND, a government agency to investigate and disseminate information between financial and law enforcement agencies for identification of suspicious money laundering, had at least Rs10 lakh in it, the sources said.
The government also received 69 requests of information from foreign financial intelligence units, while it sent 17 such requests to other countries.