Just few days after gas price hike, Finance Minister, Arun jaitley underscored that a price of $5.61 per MmBtu would ensure that explorers make gain, but not windfall profits. He asserted that rate hike, approved the Cabinet Committee on Economic Affairs (CCEA), balances interests of oil and gas explorers and consumers as this while fetching some profits to explorers would also be minimizing the burden of consumers.
Modifying the Rangarajan formula on gas pricing, the centre hiked the natural gas price to $5.61 per mmBtu from the existing $4.2/mmBtu rate, which was way lower than the demanded price hike of $8.4/ MmBtu, approved by the previous UPA government.
Justifying government’s stand on this issue, Jaitley added that he was not against business and did not consider words like ‘profits’ as wrongful, however emphasized that he did not favour ‘windfall profits’. Further, he unveiled that gas price decision was taken professionally as a committee of secretaries discounting irrelevant factors in the Rangarajan formula, approved by the previous UPA government, took into consideration only the relevant ones. Lastly, he added that gas price has been revised biannually and rather has a realistic approach.