India approves hefty rise in gas prices

India took the unpopular step of approving a gas price rise for the first time in three years, a move which could inject much needed investment in local production but boost imports of more costly liquefied natural gas (LNG). The central government approved the proposal of the Rangarajan Committee, referring to a formula, which has produced indicative prices around double current levels. The move will be unpopular with voters as local and national elections loom in the next 12 months, but is key to easing acute power shortages in the country, where cheap gas deters investment and keeps demand way above actual use. Speaking to mediapersons in New Delhi on Friday, finance minister, P Chidambaram said that that the prices of output gas has been hiked and the rates of input gas, used for power and fertilizers production is yet to be determined. The new prices will come into effect from April 01, 2014.