Reliance Industries (RIL) has agreed to temporarily supply gas to fertiliser plants at current prices, although the two sides have failed to sign new deals, the top official in the fertiliser ministry has said.
Energy group RIL's five-year gas supply agreements with sectors, including fertiliser makers and power producers expired at midnight Monday, requiring buyers to sign new contracts for supplies from its D6 block in the Krishna Godavari basin.
"RIL will continue to supply gas at $4.20 (per million British thermal units). The Fertiliser Association of India (FAI) and RIL will sit together and finalise the (next contracts) agreements as early as possible," Fertiliser Secretary Shaktikanta Das told reporters on Monday.
Das did not elaborate on the duration or other terms of potential new contracts between RIL and the fertiliser companies.
The cabinet last year approved a formula that linked prices of locally produced gas with global benchmarks, which would have nearly doubled gas prices from current levels from Tuesday.
The Election Commission asked the government to defer the price increase until the completion of the five-week general election in the middle of May.
India's main opposition party Bharatiya Janata Party (BJP), which surveys show is on course to become the largest parliamentary party, has said it will review the gas pricing formula if it is elected.
"We will pay the marketing margins and gas prices from the date as may be notified by the (new) government," Satish Chander, director general of FAI, said. He said he hoped the deadlock over the contracts would end soon.