This year summer promises to be much hotter as refrigerant gas producers who have got a 'licence' to make a killing have already jacked up gas prices. Given that the use of air-conditioners in cars, houses, hotels, restaurants, offices and factory premises has become a necessity, this is what a small cartel of four or five gas producers appear to be encashing in on India's poor policy environment.

The gas is known as di-chloro fluoro methane (CFM22) -- a product listed as 'ozone depleting substance' in the Montreal Protocol Act, to which India is one of the signatories.

The environment-friendly gas technology is in the hands of very few multinational corporations and they have not transferred the know-how to Indian companies nor have set up their operations. The environment-friendly refrigerant gases are nearly 10 times more expensive than the present CFM 22. The phase-out period agreed by all manufacturers of CFM 22 is the year 2020.

The handful of Indian gas producers had formed a cartel in 1997 and got the government to put restrictions on import of this gas which is much cheaper in other Asian countries. Without bothering much about the consumers' interest, the government had put it in the Negative List of imports and gave a free run to domestic producers to reap huge benefits. Even bulk users like automobile industry was not licensed to import cheaper inputs.

This is how a completely monopolistic market was created for a handful of producers who are selling it for Rs 400 to Rs 500 a kg to bulk buyers who are in turn palming it off at Rs 900 to Rs 1100 per kg in retail sales. If one takes a look at their export prices it is not difficult to see the quantum of profits they are generating in the domestic market.

In competition with China which is a large producer, it is being exported at as low as $1 per kg!

Besides making a killing, these producers are also getting compensation under Montreal Protocol Treaty from international funding agencies for reducing production of certain types like CFC 12 and CFC 14.

The Indian market size is estimated around 5,000 tonnes per annum and is growing at the rate of 25 per cent.

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