New Delhi, May 20 (ANI): Union Power Minister Sushil Kumar Shinde said here today that the price of electricity would increase by Rs one per unit following the increase in the prices of natural gas.
The government on Wednesday revised administrative pricing mechanism of natural gas.
CNG will become costly by about 20 per cent and the price of natural gas has also doubled.
The government has revised the administrative price mechanism of natural gas from Rs 3200 to Rs 6,118. It was last revised last in 2005.
The revision was considered essential. Power and fertiliser sectors are the major customers of Indian gas are. The cost of production for fertiliser plants is expected to go up but it will be offset by government subsidy.
Since the fertilisers are subsidised, the revision is not likely to have much impact on fertiliser prices, but for the power sector, the over-all increase would be 2.75 per cent.
The government is likely to earn an additional revenue of Rs 3500 crore per annum from ad valorem taxes.
OIL is expected to gain Rs 500-Rs 700 crore per annum while ONGC is likely to earn Rs 6000-Rs 7000 crore more per annum. (ANI)