India will take a decision on freeing the pricing of heavily subsidised gas by July, Petroleum Minister Ram Naik told a gas industry seminar in Mumbai on Wednesday.

A proposal to decontrol prices was earlier put off in December amid protests from the power and fertiliser ministries that it would make electricity and fertilisers more expensive.

There were also fears then that the move could hurt prospects for the ruling party in elections in some states in early 2003.

The government had set up a panel of ministers to study the proposal to decontrol gas prices in a move that will help gas producers and importers of liquefied natural gas but hurt cash-starved power and fertiliser firms which consume 80 per cent of the natural gas sold in India.

The oil ministry wants to liberalise the gas sector to make it more efficient and to make liquefied natural gas imports competitive.

The power ministry had objected to the higher gas price saying bankrupt state utilities would not be able to pass on the additional cost of power to their consumers.