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Modi’s Gas Gambit Faces Hurdle of Coddled Indian Consumer – Bloomberg

Modi’s Gas Gambit Faces Hurdle of Coddled Indian Consumer – Bloomberg.

India’s first increase in natural gas prices since 2010 to reverse sliding production leaves a key weakness unresolved: consumers who don’t pay enough for power.

Prime Minister Narendra Modi raised the gas tariff by about a third on Oct. 18, part of his biggest energy policy changes since taking office in May. Indebted utilities face the higher charge even as they’re required to sell electricity below cost, raising the risk they’ll favor less expensive sources of power.

“In the end, you need to charge users for their consumption — that’s the bottom line,” said Rajiv Biswas, chief Asia economist at IHS Global Insight inSingapore. Still, the gas revision is a “good” start to boost output, he said.

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