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NDA Government’s Gas Pricing Policy to be Crucial to State

With the extant pricing policy a failure, it remains to be seen if the gas pricing policy of the Modi-led government at the centre will prove beneficial to the state.

Published: 19th May 2014 09:03 AM  |   Last Updated: 19th May 2014 09:03 AM   |  A+A-

KOCHI: With the extant pricing policy a failure, it remains to be seen if the gas pricing policy of the Modi-led government at the centre will prove beneficial to the state. The revival of central public sector undertakings is another area where the state has its hopes pinned on.

The fertiliser industry in the country, which contributes significantly to the food production, is in the doldrums for over a decade. This has resulted in huge imports at the expense of substantial foreign exchange outgo.

Since 1995, the country has not received any investment in the fertiliser sector.

These factors have led to the collapse of Fertilisers and Chemicals Travancore Limited (FACT). An immediate policy level correction reflecting national priorities in this regard is essential,” said M P Sukumaran Nair, former special secretary, Kerala.

Apart from FACT, companies in the state which are badly in need of financial assistance from the central government are Hindistan Machine Tools, Hindustan News Print, Indian Rare Earth, Hindustan Insecticides, Hindustan Organic Chemicals Limited and NTPC,  Kayamkulam.  Since Kerala has joined the league of Natural Gas users, a national pricing policy for fuel has an impact on the state too.

“A prudent pricing of Natural Gas and review of pricing of Petroleum fuels- Diesel,  Petrol,  Kerosene and LPG-  are the major issues which the new government is expected to address immediately. The distorted Gas pricing policy of the UPA Government has impacted the energy sector and the manufacturing industries adversely. The lack of a proper pricing policy has not benefited the customers in the least. A price pooling system,  mixing domestic and imported natural gas, is the best alternative now,” said E P George, chairman, Kerala Chamber of Commerce and Industry.

The high price of natural gas is a major challenge in Kerala along with the non-laying of pipelines,  has ultimately led to the under utilisation of South India’s only LNG Terminal at Puthuvype in Kochi. The state has plans to produce 5300 MW power at an investment of around ` 30,000 crore from natural gas.



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