SC refuses to stay possible gas price hike

The apex court observed that the government needs to clarify the implementation of the Rangarajan Panel's recommendations.

The Supreme Court today refused to stay a possible gas price hike. The apex court observed that the government needs to clarify the implementation of the Rangarajan Panel's recommendations. The Centre is expected to take a decision by the end of this month.

It was a significant day as the newly constituted bench took up the gas pricing matter for the first time since it was constituted. Petitioners were making repeated contentions arguing that an increase of even a single dollar in terms of gas pricing will result in the government subsidy bill getting inflated by over Rs 10,000 crore. On that note, the petitioners had sought a stay on the government from going ahead in terms of revising the gas prices northwards. However, this was something that was not favourably considered by the apex court.

The Supreme Court observed that the petitioners need to have greater faith in a democratically elected government and it is premature to start pointing fingers at the newly formed government and on that note the Supreme Court refusing to grant a stay on the government going ahead and possibly revising the gas prices. So, on that front the government road is clear. However, the Supreme Court also clarified that it is important for the government to clarify with respect to the gas pricing mechanism that it intends to follow. This was in fact also one contention that was put forth by  Reliance Industries a key stake holder in this matter also arguing for greater clarity in terms of the government's stance.

With respect to the stance of the government this is one aspect on which the government took a very measured stance at this stage. The government has submitted that it will clarify, it will take a decision on the gas pricing mechanism only by the end of this month, that is after considering the report that has been submitted by the committee of secretaries.

The government had constituted a CoS or a Committee of Secretaries putting the Rangarajan Committee recommendations on hold. It is only after considering the report that has been filed by CoS that the government will take a definitive stance with respect to gas pricing. So, clearly a decision that all stakeholders will be watching very carefully. The Supreme Court in fact will take up fresh arguments on November 14 that is when this petition comes up for further hearing.

Disclosure: Network 18, which publishes moneycontrol.com, is now part of the Reliance Group.

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