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Rediff.com  » Business » Gas price hike not to affect cost of LPG, food items: RIL

Gas price hike not to affect cost of LPG, food items: RIL

March 22, 2014 08:35 IST

Reliance Industries on Friday dubbed as a "canard" allegations that the near-doubling of natural gas prices will lead to a similar hike in domestic cooking gas (LPG) and inflation in food item rates.

In its second video to be uploaded on YouTube in as many days, RIL said gas from its eastern offshore KG-D6 field is not used to manufacture LPG and as such the increase in rates from next month will have no bearing on the price of the cooking fuel.

Also, goods carriers used for transporting food items do not run on natural gas and will not be impacted by the gas price increase.

The video, recorded in the format of a news broadcast, seeks to counter propaganda by the Aam Aadmi Party (AAP), which had opposed the decision to almost double natural gas rates to $8 per million British thermal units, saying it would lead to a windfall for RIL and hit the common man hard.

"A fear psychosis is being created in that from April 1, gas prices shall be increased by the government thus stoking inflation. The canard is the handiwork of a minuscule section of polity to garner attention they otherwise won't deserve," RIL said.

Stating that the truth about natural gas pricing and its impact deserves to be understood, it said LPG is manufactured from compounds called propane and butane, which are not present in KG-D6 gas.

LPG is manufactured from crude oil in refineries and "there is no relation between LPG prices and natural gas rates," it said, adding that natural gas prices have not been

revised during the past five years even though LPG rates have gone up to about Rs 450 per cylinder from Rs 280.

"If natural gas prices had any link with LPG, then why have LPG rates been increased in last five years when gas prices have not been touched," it asked.

RIL said it was also being alleged that the gas price hike would result in transportation costs going up and lead to a cascading effect on food item prices.

"Goods carriers like truck, tempo and tractor do not run on gas but on diesel," it said, adding that gas rates do not have any bearing on the cost of transporting goods.

Without naming anyone, the company said some people did not want to present facts and want to mislead people for their narrow political propaganda aimed at garnering votes in the election season.

"Fear psychosis was being created to instigate people in name of price rise," it added. 

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