By Saurabh Chaturvedi and Prasanta Sahu
NEW DELHI--India's federal cabinet Wednesday deferred a decision
to raise state-mandated prices of natural gas by three months, a
move that is likely to disappoint explorers who have been demanding
an increase to help boost production.
"The matter requires comprehensive consultations with all
stakeholders," Oil Minister Dharmendra Pradhan told reporters after
a meeting of the ministerial panel.
This is the second time that the price increase has been
deferred.
Last year, an expert panel had recommended raising gas prices to
roughly $8 per million metric British Thermal units from $4.20
mmBtu. India's previous government had accepted the recommendation
and approved the increase from April 1. But it had to put-off the
price increase on the direction of the country's election regulator
ahead of national elections that ended last month.
Exploration companies were hoping India's new government would
implement the much-delayed price increase.
The new government "must be given time to take a call," Law and
Telecom Minister Ravi Shankar Prasad, who was also present at the
news conference, said.
Separately, the cabinet panel also increased the prices
state-owned agencies pay to farmers for their produce by up to 100
rupees ($1.6) per hundred kilogram.
The floor price for rice has been raised by 3.8% to 1360 rupees
per hundred kilogram. Prices for other farm commodities such as
pulses, oilseeds and cotton have also been raised.
These prices are closely watched by analysts as they can push up
inflation. Mr. Prasad said he doesn't expect inflation to go up
because of the latest move.
The increase is smaller than in previous years. State-set
purchase prices rose an average 24% in the fiscal year to March
2013 and a much slower 5.6% in the last fiscal year.
Write to Saurabh Chaturvedi at saurabh.chaturvedi@wsj.com and
Prasanta Sahu at prasanta.sahu@wsj.com