Even as the union cabinet decided to double the price of domestically produced natural gas to $8.4 per mmbtu from the present $4.2 mmbtu, experts are debating the pros and cons of such a move.
Some experts feel that the the move would raise the subsidy burden of the central government. Some reports indicate that the centre’s annual subsidy bill will rise by at least Rs 4,000 crore if the price was fixed at $6.7 a unit. At $8.4, the impact will be higher.
Add to that the burden on the state governments as a higher subsidy on power has to be borne by them, in case they want to protect consumers.
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